It’s both scary and cool to be a pioneer. The Indiana CPA Society just released an Integrated Report, and we were the first state CPA society in the country, and likely the first association in the United States, to do so. You might be asking, what’s that and why should I care? I’ll define what an integrated report is, tell you a little bit about our process, and why it’s important to the CPA profession.
Per the International Integrated Reporting Council (IIRC), an integrated report is: “a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.”
Integrated reporting (recognized by the symbol <IR>) aims to accomplish these four things:
- Improve the quality of information available to stakeholders
- Promote a more cohesive and efficient approach to corporate reporting
- Enhance accountability and stewardship
- Support integrated thinking, decision-making and actions that focus on value creation
Let me tell you, that’s a lot of stuff and it took some work to put the whole report together. It was especially challenging because we were ahead of other associations and a lot of companies in the United States in creating an integrated report, so we did not have a lot of guidance from other reports to use as we developed ours. We actually began the process by creating a task force of members who looked at the IIRC’s framework, which includes guidance on the principles of integrated reporting along with specific content elements to include. In addition to the framework, the task force also looked at some published integrated reports – mostly from international corporations. From there, we worked to develop a table of contents for the INCPAS report and then filled in the blanks. It went through several drafts before the task force agreed on what content was necessary to meet the requirements. The most challenging principles to comply with were conciseness and completeness. We ended up with a 39-page report, and believe it or not, early drafts were even longer.
So, we wrote a big long paper … but what does it mean for you? First, integrated reporting may be the future of business reporting. Transparency is a big deal these days. Investors, lenders, donors and other stakeholders are demanding more and more information. Reporting requirements are changing, and shouldn’t CPAs be leading the way with change, and not ignoring and resisting change? CPAs can also be leaders in coordinating the integrated reporting process, although it certainly involves other functions and departments.
We thought that by putting together an integrated report for INCPAS, it could serve as a great example for our members to actually see a report prepared for an organization that they are familiar with, and one that isn’t a multi-national multi-billion dollar entity. And that it’s possible and not that hard to do.
I have to admit that being first isn’t without its challenges, but also, it’s kind of cool at the same time to be doing something that nobody you know has actually done. Best of all, it was a really good exercise. The process of creating an integrated report makes you look at your organization as a whole to ensure that all of the different things you do actually fit together and that they are helping you to create value, whether you are an association in Indiana or a large worldwide organization.
The INCPAS integrated report was approved by the board of directors in late August. A draft version is currently available. The final version will be available in the coming weeks using that same link.