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New PAIB report on effective business reporting processes

  • IFAC (International Federation of Accountants) (lt gray) Image

Jan 18, 2013

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has released an International Good Practice Guidance document that provides guidance on implementing effective reporting processes within organizations.

The report, Principles for Effective Business Reporting Processes (link to IFAC's Web site), provides an explanation of why business reporting processes are important, noting that "high-quality business reports lie at the heart of strong and sustainable organizations," enabling stakeholder decision making, better internal decision making, and contributing to the successful management of businesses.

The report provides 11 key principles for evaluating and improving business reporting processes with practical guidance designed to outline the critical arrangements that need to be in place for effective business reporting.

These principles are summarized as follows:

  • Committing to effective reporting processes at the senior management and governing body levels.
  • Determining roles and responsibilities of people involved the reporting process across a broad range of functions, including the governing body, audit committee, senior management, legal counsel, information technology, investor relations, and others.
  • Planning and controlling the reporting processes, including implementing risk management and internal control over processes.
  • Engaging stakeholders, including entering a dialogue with stakeholders to identify material financial and nonfinancial matters when designing the organization’s reporting strategy.
  • Defining the reporting content by identifying the content to be included in reports and also deciding on the audience, layout, and timing of reports.
  • Selecting frameworks and standards, not just ensuring compliance with relevant laws, but also being familiar with other frameworks such as the IASB Practice Statement Management Commentary and the International Integrated Reporting Framework being developed by the International Integrated Reporting Council (IIRC).
  • Determining reporting processes by identifying information needs, information processes, and related systems.
  • Using reporting technology by establishing a process that evaluates and improves the presentation of information by taking advantage of the possibilities of new technologies such as eXtensible Business Markup Language (XBRL).
  • Analyzing and interpreting reported information sufficiently before providing it to internal and external stakeholders.
  • Obtaining assurance and providing for accountability, not only from a compliance perspective, but also considering voluntary internal or external assurance on reports and reporting processes.
  • Evaluating and improving reporting processes on a regular basis to maintain reporting effectiveness.

Click for IFAC press release (link to the IFAC's Web site).

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