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Part One
I first heard the term integrated reporting or <IR> in 2014. An officer of the Philippine Institute of CPAs asked me then if I was familiar with the <IR>. I immediately responded with a vague “Yes.” I recalled hearing this term in a meeting of global accountancy leaders in 2014, which I attended as the then chairman of the Professional Regulatory Board of Accountancy (BOA). At that time, I vaguely knew of what <IR> was all about.
Fast-forward to the present. I am now an advocate of integrated reporting (and the mindset of Integrated thinking) and firm believer of the benefits of this discipline. In the recent World Congress of Accountants held in Sydney, Australia, that I attended from November 5 to 8, 2018, various speakers dwelled on the developments in the <IR> and thinking. It was clear from the tone of the talks that integrated reporting and thinking provides so much value and relevance to the
development of not only business but also to global issues,
What is <IR>? Its beginning can be traced to the Prince of Wales, Prince Charles, who initiated a project on Accounting for Sustainability Project (A4S). This initiative was started in 2004 and aims to inspire action by business leaders to shift toward resilient business models and a sustainable economy. In 2009 Prince Charles convened a high level meeting of United Nations representatives, financial decision makers, business executives, government regulators, accountancy standard setters and professional organizations, nongovernment organizations, including the A42, International Federation of Accountants (Ifac) and the Global Reporting Initiative (GRI), to establish the International Integrated Reporting Committee, now renamed Council. This Council was mandated to oversee the creation of a globally accepted Integrated Reporting framework. In 2013 the IIRC released the International <IR> Framework, which is the model that is generally being utilized today. In its web site, the IIRC’s vision is stated as aligning the capital allocation and corporate behavior to the wider goals of financial stability and sustainable development through the cycle of integrated reporting and thinking.
The <IR> has emerged over the recent years with many global organizations pursuing related or aligned undertakings. The Intergovernmental Working Group of Experts of International Standards of Accounting and Reporting of the United Nations has initiated discussions on coming up with core indicators for the financial and nonfinancial reporting on the attainment of the UN Sustainable Development Goals. The Ifac has created an Emerging External Reporting (EER) Task Force to prepare a report on the different forms of nonfinancial reporting, integrated reporting, sustainability reporting and other reporting about environmental, social and governance. The GRI has developed the first and most widely adopted global standards for sustainability reporting and has a Southeast Asian Office in Manila since 2016. A number of large corporations in the Philippines are preparing their sustainability or integrated reports together with their financial statements.
The <IR> has emerged. Including in the Philippines.
To be continued
Joel L. Tan-Torre is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010 and the chairman of the Professional Regulatory Board of Accountancy from 2014 to August 2018.
This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.