Accounting is a concept or subject which is used as a measurement tool in various streams as per their needs and requirements. This is a process of retaining records and transactions, evaluating and a way of communicating information about economical structure of organisation. In this essay, concept of accounting is elaborated in respect of corporate social and environmental disclosures (van Bommel, 2014). Corporate social responsibility defines duties and liabilities of organisations in terms of society, stakeholders and the environment. This is considered as a business approach suitable to assist organisational structure more flexible and convenient to society and stakeholder welfare.
CSR makes operations and management of organisation more viable and ethical and helps to attain economic, social and environmental benefits. This is also one of the essential aspect subject to building credibility and faith among stakeholders, society and environment. There is a specific board formed in organisations for monitoring CSR activities. These activities remain associated with awareness about human rights, corporate governance, environmental effects, working conditions, health and safety and economical aspects.
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Purpose and Necessity of corporate integrated reporting and the theories
It is seen that last two decades, corporate social and environmental disclosures are increasing in separate stand alone reports in addition to types of other media. That organisations are not adapting the basic structure of integrated accounting process. Stand-alone reports are rapidly used by organisations for presenting information and details to stakeholders and the external parties. Stand-alone reports remain more complex and critical to understand and elaborate the dimensions of use. These reports increased the level of complexity in respect of making financial reports and analysing financial plans. Moreover, these reports also create problems for stakeholders to understand the corporate governance and dimensions of business. Stakeholders, government and environmental aspects are considered important elements which remain essential in terms of accounting. A proper disclosure is required in terms of analysing the structure and compliance and financial reporting (Lodhia, 2015).
Corporate integrated reporting remain involved in analysing and evaluation of corporate governance structure, analysis of basic needs and requirement to maintain financial sustainability, creation of values and standards to make ethical and environmental friendly compliance structure of business. Integrated reporting is used as a tool to explore the vision of analysis and evaluation of compliance and corporate governance.
International Integrated Reporting Council launched introduced a framework for integrated reporting. This contains principles and concepts related corporate rules, policies and concerns. This helps to sort out organisational strategies, performance, governance and prospect which vantage the creation of values. This encourage managers to prepare reports and performance in respect of strategies which are elaborated subject to capital use. It provides long term overview and vision of organisation (Monterio, 2014).
Integrated reporting plays vital role in internal decision making process and strategic planning. Primary purpose of integrated reporting is to provide an overview of organisation in terms of building strong infrastructure of This is basically helps to align all the essential aspect which remain associated with corporate governance and managing, maintaining ethical structure of organisation. This provides an ethical structure to present the information in systematic manner so that stakeholders and society be able to understand the aim and objective of organisation. It defines the strategies and plans related for corporate social responsibilities and corporate governance structure.
These reports not only helpful for external parties and stakeholders of organisation but also remain essential for internal parties such as employees, managers, business parters, board of directors, owners, suppliers, customers, legislators, compliance managers and authorities, policy makers and finance planners. This is basically remain associated with effective use of capital and management and alignment of resources for assisting the structure of business. Integrated reporting reduce the burden of sorting out equations and complexities which remain associated with capital finance and planning. Value creation is also one of the main objective of Integrated reporting.
There are types of information are essential in financial planning and reporting while preparing compliance strategies and plans. This mainly assist corporate reporting, legal and compliance structure, making action plans and future vision, long term objective and focusing towards forecasting and projection of financial plans (Corporate Integrated reporting, 2018). There is a use of historical financial statements and reports to make corporate reports and integrated reporting purpose. It creates path to next generation of the annual reports and enables stakeholders to frame informed structure of organisation.
To build an viable and reliable compliance structure integrated reporting are considered within organisational context. This provides a base to elaborate and make the accounting structure suitable for both stakeholders and environment. Value creation is the main base of compliance structure (Benn, Edwards and Williams, 2014).
Principle based framework
International Integrated reporting Council (IIRC) provides a principle based framework through which organisations can disclose and measure the standards of presenting financial information. This permit all kind of business entities to set out their own compliance and corporate standards, rules with the help of pre decided rules. It prevents the checklist approach. It enables organisations to execute their values creation in more effective and organised manner. This is not a single point which remain associated with analysing plans and strategies for effectiveness of plans and objectives. IFRS rules related to financial reporting and financial planing are considered in this context. This provides more revenant and reliable aspects in respect of financial performance and compliance structure of organisation.
Materiality and facts are the main objective of integrated reporting. Information and detail are advisable and acceptable only when then these information contains relevance and reliability. Legal consolidation, assessment of risk associated with corporate financial aspects and reliability and relevance. Regulatory reforms and legal structure is followed for making integrated reports. It also provide an insight into the organisation's sources and connections with capital finance and creating capital values. These capitals are considered as financial manufactured, human, social and relationship, intellectual and natural capital (Maas, Schaltegger and Crutzen, 2016,).
Apart form it there are few components used while framing compliance structure of organisation. Integrated reposting is made around some key components such as overview and in-depth knowledge about the business structure and external environment which is operated effectively, it build the supports its ability to create values, business model, opportunities and risks are directed with the help of company's intellectual properties, allocation of resources and relevant strategies. Plans are also proposed to elaborate dimensions of corporate ethics and rules. There are some presentation needs remain associated to elaborate the quantitative aspects related to corporate ethics and governance.
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There analysis of integrated reporting in social and environmental aspect done in this essay. It is seen that from past two decades stand-alone reports are creating complexity to stakeholders, societies, communities and corporates. CSR and integrated reporting was disappearing form the system. This essay present an overview of accounting and reporting in respect of corporate social and environmental disclosures and complexity of stand-alone reports also defined. There is a critical analysis and evaluation done in respect of purpose and necessity of corporate integrated reporting and the theories. Purpose and necessity of corporate integrated reporting for stakeholders, communities, societies and internal parties are defined in this context. Role of IIRC in respect of building the structure of Integrated reporting with in the organisation also explained.
- van Bommel, K., 2014. Towards a legitimate compromise? An exploration of integrated reporting in the Netherlands.Accounting, Auditing & Accountability Journal. 27(7). pp.1157-1189.
- Lodhia, S., 2015. Exploring the transition to integrated reporting through a practice lens: an Australian customer owned bank perspective.Journal of Business Ethics. 129(3). pp.585-598.
- Monterio, B.J., 2014. Integrated reporting and corporate disclosure.Strategic Finance. 95(9). p.54.
- Benn, S., Edwards, M. and Williams, T., 2014.Organizational change for corporate sustainability. Routledge.
- Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment, management accounting, control, and reporting.Journal of Cleaner Production. 136. pp.237-248.