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Early assessments of the gap between integrated reporting and current corporate reporting

Warwick Stent (School of accountancy, Massey University, Albany, New Zealand)
Tuyana Dowler (School of Accountancy, Massey University, Auckland, New Zealand)

Meditari Accountancy Research

ISSN: 2049-372X

Article publication date: 13 April 2015

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Abstract

Purpose

The purpose of this paper is to provide early assessments of the changes for corporate reporting processes, which an emerging initiative like integrated reporting (IR) will require. The authors also consider the potential for these changes to contribute towards resolving major problems such as financial and environmental crises. IR is gaining momentum globally, and the implementation of some form of future mandatory requirement in this regard appears likely.

Design/methodology/approach

The authors begin by developing a reporting checklist based on the requirements for IR, which they use to assess the gap between current “best practice” reporting processes and IR. They then propose systems thinking, a widely accepted approach to problem-solving, as a theoretical basis for assessing the IR Framework and for deeper consideration of the gap analysis. They demonstrate, at a paradigm level, how systems thinking can be used to assess IR and find that IR has the potential to offer specific and implementable strategies for operationalising systems thinking principles.

Findings

The authors assess 2011 annual reports and related online reporting practices for four New Zealand “best practice reporting entities”, using their reporting checklist. Although none of their sample entities published a full integrated report for 2011, reporting scores range from 70 to 87 per cent. The findings suggest that current reporting processes lack the integration, oversight and due attention to future uncertainties required by IR. While this appears to be a relatively small gap, systems thinking principles indicate that these deficiencies may be critical to sustainability and financial stability, the stated aims of IR.

Research limitations/implications

The normal limitations which apply to small sample studies.

Practical implications

The IR reporting checklist and systems thinking proposal could be used by policymakers, standard setters and firms to assist in assessing IR’s potential and the additional requirements it will impose for corporate reporting.

Originality/value

This study answers calls in the literature for a reactivation of the normative research agenda by assessing IR against systems thinking, a widely accepted approach to problem-solving. It contributes further to an understanding of IR through the development of a unique reporting checklist and by offering empirical evidence derived from application of this checklist.

Keywords

Acknowledgements

The authors thank Kambiz Maani for his encouragement and guidance regarding the application of systems thinking in the setting for the study. They also thank Asheq Rahman for sharing his time and expertise so unselfishly as well as Chris van Staden, Charl de Villiers and particularly two anonymous reviewers for their helpful comments and suggestions. Finally, they gratefully acknowledge contributions of participants at the NZ SARS 2013 Sustainability Research Symposium, 2014 Meditari Conference and seminar presentations at University of Cape Town, Rhodes University and University of Pretoria, through the thoughtful feedback which they provided.

Citation

Stent, W. and Dowler, T. (2015), "Early assessments of the gap between integrated reporting and current corporate reporting", Meditari Accountancy Research, Vol. 23 No. 1, pp. 92-117. https://doi.org/10.1108/MEDAR-02-2014-0026

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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