Accounts and accountability - what is integrated reporting?

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"Few countries can claim that integrated reporting (IR) is common among domestic companies. An exception is South Africa, with many listed and public organizations having produced integrated reports for over six years. The emergence of IR as the dominant form of corporate reporting in South Africa has produced a significant number of internal and external benefits for the companies that have adopted it "

- The CPA Journal by Leigh Georgia.

Integrated reporting has been around for over six years, but many still ask what it is. Is it applicable to my company?

Integrated reporting in South Africa began with principle five of the King IV code, which states that 'the governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation's performance, and its short, medium and long-term prospects '.

So, what is an integrated Report?

The King IV code defines an integrated report as a "holistic and integrated representation of the company's performances in terms on both its finances and its sustainability." 

This report should tell the company's story, including historical financial information, strategic direction, targets, risk and opportunities, which will be addressed in the medium to long term.

The board of directors has a responsibility to its shareholders and other stakeholders. This report should highlight both the positive and negative impacts of the company's interactions with its stakeholder and provide forward-looking information which will enable the users to make informed decisions.

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Whose responsibility is it to prepare the integrated report?

The board of directors is ultimately responsible for the integrated report. However, they may be assisted by various committees.

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Which companies are required to prepare an integrated report?

In South Africa, listed companies are required to submit an integrated report on compliance or explain basis.

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What are the pros and cons?

The main advantage of preparing an integrated report is that it improves the transparency of a company's social responsibilities and help demonstrates how the company has created social value over time. 

The main disadvantage of integrated reporting is that it includes non-financial information, which is more time-consuming to prepare. It also requires high expertise to understand this report.

An integrated report typically contains the following items:

1. Annual Financial Statements 
2. Directors' reports 
3. Director's Statement of responsibility 
4. Management and directors' commentary
5. Report of the audit committee
6. Sustainability report
7. Risk Disclosures
8. IT Reporting
9. Remuneration report
10. Statement by the company secretary
11. Terms of reference of committees and 
12. Ethics Statements.

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