Exploring the challenges of preparing an integrated report
- 2 October 2017
- journal article
- research article
- Published by Emerald in Meditari Accountancy Research
- Vol. 25 (4), 481-504
- https://doi.org/10.1108/medar-10-2016-0085
Abstract
Purpose The purpose of this paper is to add to the limited body of interpretive research on integrated reporting by exploring challenges to preparing an integrated report. This is done using an integrated thinking framework which stresses the importance of an interconnection between sustainability performance, proactive sustainability management and integrated reporting. Design/methodology/approach Detailed interviews with 26 preparers at 9 South African-based organisations highlight practical issues encountered when producing an integrated report. Findings Integrated reporting is not consistently seen as a natural part of the business process, despite the relevance of multiple types of capital for organisations’ business models. The new report format is imposed on existing internal processes and reporting protocols which precludes a broad understanding of the purpose of integrated reporting and limits the development of management control systems and a supporting accounting infrastructure. In this constrained environment, reporting guidelines are used as disclosure checklists, stakeholder engagement is limited, systems are not always compatible and data analysis is difficult. Preparers are also unconvinced that integrated reports are taken seriously by investors, further limiting the interconnection between sustainability performance and integrated reporting. Research limitations/implications Those charged with governance need to ensure that their organisations are identifying so-called non-financial issues as strategically relevant. Sustainability performance targets need to be clearly defined and linked to specific performance indicators. The management control systems and accounting infrastructure must be planned and developed to assist with the monitoring of sustainability performance and, in turn, to inform what information is included in integrated reports. Originality/value This study answers the calls for primary evidence on how integrated reports are prepared and the associated challenges. The findings add to the limited body of interpretive research on the functioning of corporate governance and accounting systems and offers practical insights for preparers and academics.Keywords
This publication has 65 references indexed in Scilit:
- Where firms choose to disclose voluntary environmental informationJournal of Accounting and Public Policy, 2011
- Determinants of Traditional Sustainability Reporting Versus Integrated Reporting. An Institutionalist ApproachBusiness Strategy and the Environment, 2011
- Accounting, professions and regulation: Locating the sites of professionalizationAccounting, Organizations and Society, 2006
- An ecological modernist interpretation of sustainability: the case of Interface Inc.Business Strategy and the Environment, 2006
- The impact of voluntary environmental protection instruments on company environmental performanceBusiness Strategy and the Environment, 2004
- Assessing the impact of environmental management systems on corporate and environmental performanceJournal of Operations Management, 2002
- The End of South African Sanctions, Institutional Ownership, and the Stock Price Performance of Boycotted FirmsBusiness & Society, 2002
- Using case studies in researchManagement Research News, 2002
- The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational FieldsAmerican Sociological Review, 1983
- Institutionalized Organizations: Formal Structure as Myth and CeremonyAmerican Journal of Sociology, 1977