The International Integrated Reporting Council (IIRC) has published its 2018 integrated report with, for the first time, limited assurance from an independent auditor.
The IIRC Board’s decision to seek assurance reflects its determination to follow the principles the IIRC advocates, as it works to build robust and effective reporting globally. Assurance is also an effective tool for ensuring the IIRC’s key stakeholders can have confidence in the IIRC’s value creation story.
Obtaining assurance over integrated reports is an emerging trend, with the IIRC receiving what is referred to as ‘limited’ assurance on this 2018 report. The auditors reviewed the report to assess whether it had been prepared in line with the guiding principles of the International <IR> Framework and to ensure it covered the key content elements. The auditor confirmed that the most significant data, statements and assertions within the report regarding the IIRC’s activities had been extracted appropriately from underlying documentation and appropriate external sources.
The IIRC will now continue this journey and work towards obtaining ‘reasonable’ assurance, where the auditor looks at whether the strategy, business model and performance presented in our integrated reports are an accurate reflection of how the IIRC operates.
The report evaluates progress the IIRC made in its mission to mainstream integrated reporting during 2018, as the IIRC moved from the ‘breakthrough phase’ to the ‘momentum phase’ of its strategy.
Third party research showed continued significant growth of adoption in markets such as Japan and Australia, and EY’s 2018 global investor survey indicated that investors now consider integrated reports the most useful source of non-financial information.
2018 also saw the launch of the Corporate Reporting Dialogue’s ‘Better Alignment Project’. Convened by the IIRC, the initiative is working to bring greater consistency, coherence and clarity to the corporate reporting landscape, a major objective of the IIRC’s momentum phase strategy. The initial report of the Better Alignment Project will be launched this month (September 2019) during Climate Week NYC.
Commenting on the decision to obtain limited assurance on the IIRC’s 2018 Integrated Report, Barry Melancon, Chair, IIRC Board said:
“The IIRC has long recognized the role assurance can play in building trust and confidence in integrated reports and this trend has been reflected by developments we are seeing in the market. We believe the lessons we learned in obtaining assurance will help us in our conversations with businesses around the world that are also embarking on the journey to provide investor-grade information in their integrated reports.
“Our <IR> Business Network remains the beating heart of these conversations, bringing together those pushing the boundaries of reporting further each year. During 2018, we initiated projects ranging from developing a model for strategy and integrated thinking to providing guidance on the role of technology in reporting. It is right that the IIRC as an organization adopts the principles it advocates during these discussions and that is why I believe our 2018 integrated report represents a leap forward in our approach to reporting.”
Commenting on the publication of the report, Charles Tilley, Interim CEO, IIRC said:
“We learned a lot during the process of receiving assurance on our 2018 integrated report. It ensured we were all thinking about the materiality of the information we included, as well as its robustness. The process helped us develop our integrated thinking, ensuring the Board were applying their collective mind to those factors the management team consider material to our ability to create value in the short, medium and long term.
“We made efforts to ensure that this is an honest reflection of momentum towards integrated reporting and to include both the risks and opportunities the IIRC is facing in this phase of our strategy, as we work with our partners towards global adoption.
“As the report sets out, whilst there will be challenges during our momentum phase there are also huge opportunities to bring the benefits of integrated reporting to new markets and businesses and I look forward to advancing this further over the coming months and years.”
In introducing integrated reporting to new markets and building momentum therein, focus has been placed on addressing the information needs of diverse stakeholders. This is achieved through the release of the integrated report in multiple mediums. The development of the digital content, the comprehensive end-to-end HTML on-line annual report and an executive summary for mobile devices was produced in partnership with Smart Media The Annual Report Company. The online HTML version provides readers with an overall view of the organisation and its strategic direction while the mobile summary is succinct and complete.
Commenting on this approach, Chairman of Smart Media, Dr. Vijith Kannangara said, “As digitisation has taken root in the way stakeholders consume information, it’s important to ensure that the online HTML and mobile versions are interactive as well as comprehensive and concise.”
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