16 April 2013 — The International Integrated Reporting Council’s draft integrated reporting framework is an important step towards better business reporting that could ultimately address the gap between reporting content and business value, KPMG says.
The Integrated Reporting provides an opportunity for companies to make their case for capital more effectively by focusing their reporting on their business story and value creation.
KPMG International deputy chairman Alan Buckle said the company urged regulators, investors and governments to actively drive for change for better business reporting which can help ensure future financial stability.
But while welcoming the draft framework as an important step in the evolution of corporate reporting, KPMG also called on the IIRC to address the many different interpretations of integrated reporting in the marketplace.
Mr Buckle said he hoped the final version of the framework would address any risk of misinterpretation to ensure reports stay focused on helping readers understand how the earnings potential of the business has been developed and protected.
The test of success would be whether Integrated Reporting was able to provide investors with the information needed to make better judgements on businesses’ ability to generate returns over the long term, he said.
KPMG Australia’s Better Business Reporting Group leader Michael Bray said integrated reporting provided an opportunity to re-align corporate reporting with investor decision-making.
“It is an opportunity to shift the reporting focus from short-term financial performance to long term value creation.”