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ACCA report on integrated thinking

  • ACCA (UK Association of Chartered Certified Accountants) (lt green) Image

29 May 2021

The Association of Chartered Certified Accountants (ACCA) has published a report which looked at three key ways in which integrated thinking is communicated in the annual integrated report.

These are first through clear communication of strategy, second through pertinent discussions about non-financial value drivers that form the basis of the multi-capitals model, and third through consistency between the narrative report and the financial statements.

The ACCA reviewed fourteen 2019/20 integrated reports of companies in the International Integrated Reporting Committee's (IIRC's) <IR> Business Network.  It highlights that 'while the quality of many aspects of integrated reporting is improving....integrated thinking - or at least its representation in the report - is not yet at the stage where it can be considered a truly embedded management approach'.  Detailed findings, based upon the review of those companies, revealed that:

  • There were divided views about the purpose of an integrated report, with nearly half of the companies positioning their integrated reports as sustainability reports.
  • Strategy and strategic goals were not always communicated coherently.  The ACCA found that reporting on governance, business model and outlook were often divorced from strategy and lacked consideration of future horizons.
  • Sustainability objectives were not fully connected to the overarching corporate strategy. 
  • Multi-capitals thinking was yet to fully take root.  The ACCA found that key value drivers were not discussed consistently throughout the integrated reports, which might point to a lack of consensus across the business as to what the key value drivers are. 
  • The integrated report was not always consistent or connected with the financial statements, for example not referencing impairments recorded in the financial statements in integrated reports.

The report includes best practice examples and a set of 10 tips for organisations that wish to improve the way they communicate integrated thinking through their reporting.

A press release and the full report are available on the ACCA website.

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