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Integrated Reporting And Positive Accounting Theory Research Paper

Integrated Reporting & Positive accounting theory Integrated reporting

According to IIRC 1.18-1.20, there is an ideal of seamless integration between all competing perspectives that is honored by the integrated reporting perspective. However, despite the strengths of this concept, the notion of a truly seamless presentation of competing data remains elusive. It is true that for a long time, the profession of accounting has been criticized for placing undue emphasis on short-term financial data when evaluating the performance of an organization. This can make it difficult for investors to comprehend the state of health of an organization and make wise decisions with their money. The integrated reporting framework was designed to address this and "is organized around the concept of reporting on 'capitals,' including financial, manufactured, intellectual, human, social and relationship, and natural capital. Under each of these headings are a series of disclosures that a company might make" (Cohn 2013). The presumption of the integrated reporting framework is that the financial health of a company cannot solely be measured in profits;...

There is also a concept that 'ethics' must play a role in the evaluation of a company, given the extent to which ethical problems can impact the health of the organization in the long-term. For example, "Clorox highlighted its environmental efforts in a 2010 sustainability report that was timed to coincide with the release of its annual report," in response to environmental groups that accused it of greenwashing, resulting in a more favorable assessment of the company (Cohn 2013).
However, creating a truly integrated approach can be extremely difficult. First and foremost, the paradigms of the different disciplines (financial vs. environmental or social) can be very difficult to truly integrate. Secondly, evaluating concepts such as human capital and sustainability can be very subjective and can vary in importance from industry to industry. Having innovative ideas are essential in IT but may be less so in the case of discount retail companies, for example. Regarding, concepts like 'social good,' the methods of evaluation can be so varied…

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Bibliography

Cohn, M. 2013. Integrated reporting makes its debut. Accounting Today. Available:

http://www.accountingtoday.com/news/Integrated-Reporting-Makes-Debut-66383-1.html

(17 Sept 2013)

Integrated reporting. (2011). Deloitte. Available: http://www.deloitte.com/assets/DcomSouthAfrica/Local%20Assets/Documents/deloitte_integrated_reporting.pdf (17 Sept 2013)
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