F2 - 16. Further Analysis of Financial Statements

Question 1

What is an integrated report?

Answer 1

A report to stakeholders on the strategy, performance and activities of an organisation to create and sustain value over the long term

Question 2

What are the 4 objectives of an integrated report?

Answer 2

1. Improve the quality of information for investors
2. Promote a more cohesive and efficient approach to corporate reporting on a full range of factors that create value
3. Enhance accountability and stewardship
4. Support Integrated thinking and decision making

Question 3

What is integrated thinking?

Answer 3

• Actively considering the relationships between the various operating and functional units,
• the capitals that the entity uses and the connections, and
• interdependencies between the factors that affect an organisation’s ability to create value over time

Question 4

What are the 6 capitals considered in integrated reporting?

Answer 4

1. Financial
2. Intellectual
3. Social and relationship
4. Human
5. Manufactured
6. Natural

Question 5

What are the 7 guiding principles of IR?

Answer 5

1. Strategic focus
2. Connectivity of information
3. Stakeholder relationships
4. Materiality
5. Conciseness
6. Reliability
7. Comparability

Question 6

What are the 5 main benefits of an IR?

Answer 6

1. More forward looking and holistic
2. Better information about the non financial factors that can influence profits
3. Helps stakeholders identify and manage risks
4. Improves management decision making
5. Improves employee engagement

Question 7

What are the 3 main limitations of IR?

Answer 7

1. It is voluntary and not audited, so can choose what is disclosed
2. Not always balance of positive and negative
3. Can be long, which reduces usefulness