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In recognition of their shared vision for the evolution of corporate reporting, the International Federation of Accountants (IFAC) and the International Integrated Reporting Council (IIRC) have signed a Memorandum of Understanding (MoU) to promote cooperation, coordination, and alignment.
Integrated Reporting (“IR”) is the language for sustainable business. It is the means by which companies communicate how value is created and will be preserved over the short, medium, and long term. This information is used principally by investors to support their capital allocation decisions. It involves processes, one result of which is communication, most visibly through a concise “integrated report,” about the way in which an organization’s strategy, governance, performance, and prospects lead to the creation and preservation of value.
<IR> represents an evolution in corporate reporting, building on recent developments in financial and non-financial reporting. Through this MoU, IFAC and the IIRC recognize the opportunities that exist to work more closely together to promote, support, and contribute to the realization of mutual interests.
“There are inherent synergies between the work of IFAC and the IIRC in support of an internationally accepted framework for integrated reporting,” according to IFAC Chief Executive Officer Ian Ball. “Traditional financial reporting alone is no longer enough information for investors and stakeholders. A more complete picture is needed, and the work of the IIRC will help guide organizations to achieve this.”
Commenting on the signing of the MoU, IIRC Chief Executive Officer Paul Druckman said: “The ability of business to measure and communicate what really matters is an increasing demand of investors and other users of corporate information. <IR> enables a business to tell its value creation story in a way that gets to the heart of what makes the business tick today and in the future.
“The accountancy profession globally has a vital role to play in providing confidence in the validity of both the narrative and the numbers that businesses must disclose to secure investment and provide transparency. This MoU underscores the value that both IFAC and the IIRC place in this continued partnership, and its role in helping to secure an evolution in corporate reporting that supports efficient and productive capital markets, and a more sustainable global economy.”
IFAC, as the global organization for the accountancy profession and representing 167 professional accountancy organizations around the world, has a mandate to speak for the accountancy profession and to facilitate the development and adoption of high-quality, international standards of accounting and auditing as well as serve the public interest.
The IIRC’s mission is to create the globally accepted <IR> Framework that elicits from organizations material information about their strategy, governance, performance and prospects in a clear, concise and comparable format. The Framework will underpin and accelerate the evolution of corporate reporting, reflecting developments in financial, governance, management commentary and sustainability reporting. The IIRC will seek to secure the adoption of by report preparers and gain the recognition of standard setters and investors. Through cooperation, IFAC and IIRC will enhance their respective missions and strategic goals.
Source: International Federation of Accountants
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