Unit 6: Integrated Reporting

Question 1

Define integrated reporting.

Answer 1

a process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation.

Question 2

Define integrated thinking

Answer 2

Integrated thinking is a process of decision making, management, and reporting that is based on the connectivity and interdependencies among factors that affect the ability to create value

Question 3

What is the main purpose of the integrated report?

Answer 3

The main purpose of the integrated report is to give providers of financial capital more information about how an entity creates value over a period of time

Question 4

What are the three required fundamental concepts of integrated reporting

Answer 4

1. Value creation
2. The 6 capitals
3. Value-creation process

Question 5

What are the six capitals of value creation?

Answer 5

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

Question 6

What are the nine Content Elements of the integrated reporting framework?

Answer 6

Organizational overview and external environment
Governance
Business model
Risks and opportunities
Strategy and resource allocation
Performance
Outlook
Basis of preparation and presentation
General reporting guidance

Question 7

What challenges should an organization consider when adopting an integrated reporting framework?

Answer 7

Materiality
Data quality
Assurance
Lack of standards
Tone at the top

Question 8

What are the benefits of adopting integrated reporting?

Answer 8

Linking financial and nonfinancial information
Better decision making and resource allocation
Improved stakeholder relations
Increased employee engagement
Decreased reputational risk
Improved measurement and internal control systems for nonfinancial information

Question 9

What costs are incurred through the adoption of an integrated reporting framework?

Answer 9

Collecting and analyzing new types of data
Setting up new data sets
Hiring people with proper analytical skills
Setting up new internal control systems
Assurance on the integrated report
Disclosing true but negative or competitive information

Question 10

What elements make up the value-creation process?

Answer 10

Inputs
Business model
Business activities
Outputs
Outcomes