Integrated reporting is a key instrument used to inform stakeholders about the sustainability issues of a company. It as an approach in Audit and Assurance Services used to evaluate the sustainability performance and financial position of companies in a holistic manner. Integrated reporting aims for companies to present their operations transparently in environmental, social and governance (“ESG”) practices.
Integrated reporting is a reporting process that includes information on sustainability performance as well as financial data. Within this process, auditors have significant role of evaluating the sustainability data while auditing the company’s financial statements. Therefore, it provides better understanding of financial performance and its sustainability performance and their interaction.
Integrated reporting enables stakeholders to assess the company’s operations, activities and performance in a more comprehensive manner. Investors, employees, customers, society and other stakeholders seeks to access not only to financial data but also to information on sustainability performance including ESG. This reporting approach can answer these expectations, and help stakeholders to achieve more informed decisions and support their growth.
The primary purpose of an integrated report is to improve the quality of information available to providers of financial capital by communicating broader and more relevant information that can assist in effective capital allocation decisions simultaneously. Businesses can take strategic and operational measures to be successful in terms of sustainability as well as financial success.
Consequently, integrated reporting as a framework that evaluates both the financial and sustainability performances of businesses and promotes a more cohesive and efficient approach to corporate reporting and aims to improve the quality of information available. This approach enables and informs stakeholders to access more comprehensive and holistic information including guiding and motivating businesses to achieve their sustainability goals.