@GRIAusConf_Joining The Dots – an introduction to and trends in integrated reporting - Hwang Soo Chiat

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  • 1. + Joining The Dots – an introduction to and trends in integrated reporting . Chair: Rebecca Gunn, Manager, Sustainability Reporting, BHP Billiton, Member GRI Stakeholder Council Hwang Soo Chiat, Associate Professor, School of Accountancy, Singapore Management University Terence Jeyaretnam, Director, Net Balance Nick Ridehalgh, Partner, KPMG; Content Taskforce Member, IIRC Victoria Whitaker, Network Manager, Focal Point Australia, Global Reporting Initiative
  • 2. + What Accountants need to know about Integrated Reporting: An Asian Perspective Dr Hwang Soo Chiat Wong Dan Chi (DC)Singapore Management University Paia Consulting Photo credits: Getty Images
  • 3. + Study What is this about? Who are the respondents?  Ongoing study  Respondents:  Current results largely based  46 professionals on SG. KR responses so far  Key representatives from are from reporters which are similar to responses from SG Sustainability reporting. reporters. Management or Finance  Survey opinions on  64 students from Accounting  Disclosure & Business  Valuation  Standardisation  Education
  • 4. No. of GRI reports in SG &+ KR Current picture Source: GRI database, 20 Mar 12 SG 69 Korea 58 No. of GRI reports in Asia 37 34 500 31 Source: GRI database, 20 Mar 12 410 16 5 7 9 10 400 0 3 300 Year of Publication 200 Breakdown of GRI reports in 2011 100 33 Japan 0 114, 28% Year of Publication India 27, 7% China Korea 115 34 28% 8%
  • 5. + Results - Disclosure Summary: Non-financial reporting is important (87%) and useful (85%). The greatest perceived cost of reporting are direct costs required to gather information and prepare reports. Opinions differ regarding time taken to reap benefits. 80% 76% 41% 65% 35% $ Direct costs needed to obtain information $ Direct costs needed to prepare report $ Costs to modify accounting system $ Cost of assurance for accuracy & relevance $ Risks of bad publicity if company is transparentTop reasons for disclosure: Time taken to reap benefits 35% 33% 78% Improved reputation/brand 24% 74% Improved stakeholder 4% 2% 2% communication and relationships 61% Identify areas for cost savings, reduced wastage (in years)
  • 6. + Results - Valuation Summary: Most believe that non-financial information should be valued both quantitatively and qualitatively. Most also believe that it is possible to draw links between financial and non-financial information. 4% 18% 26% 78% 74% Quant, in financial terms only Quant, in both fin & non-fin terms Quant & qualitative, in both fin and non-fin terms Agree Neutral Disagree 78% 74% thinks that non-financial information strongly or moderately agrees that it should be disclosed, it should be is possible to draw links between valued both quantitatively and financial and non-financial qualitatively. information.
  • 7. + Results - Standardisation Summary: 76% strongly or moderately agrees that standardisation is necessary, with greater comparability cited as the main reason. There appears to be low level of sustainability reporting standards. Top reasons against Awareness of Standards standardisation:  50% Standards tend to be biased towards beliefs of certain countries or industries, even with multiple stakeholder engagement approaches  36% Each country or different stock exchanges may have their own legislation Users requirements Marginal difference btwn no. of people aware and no. of users
  • 8. + Results - Education Summary: Majority there is a need for accountants to receive education in non-financial reporting, particularly on valuation techniques and drawing linkages between non-financial and financial reporting. Topics of interest 90% says “YES”: 70% 63% There is a need for 58% 57% accountants to receive formal education on non- 43% financial reporting. 96% says “YES”: 0% Regulatory and voluntary trends in non-financial reporting There is a need for accountants to undertake Introduction to non-financial reporting frameworks short courses on non- Valuation techniques of non-financial information financial reporting. Drawing meaningful linkages between non-financial and financial information
  • 9. + Moving forward: Preliminary recommendations  Awareness raising (still at nascent stage)  Promote trust in framework: GRI Ambassadors  Leverage on authority: GRI with various levels of check  Value chain: For SMEs to adopt standard What’s next  Develop the results into full report for GRI conference, and conduct further research for other reports/academic papers  Talk to us if you’re interested to receive detailed results (danchi@paiaconsulting.com/schwang@smu.edu.sg)