midfielder
Well-Known Member
HHHHMMMmmmmmmmmmmmmm in my monthly journal the following appeared and I looked up to the sky and said ... YES WE CAN....
Just loved the title ... posted article below ... quite boring actually ... I can see myself now bounding out of my Ettalong Beach office with a Mariners cape ....
If you want to read it ... but just through I would share the title...
Can accountants save the world?
The big accounting idea known as ‘integrated reporting’ has attracted the attention of the profession’s best-known historian.
The current global economic period can be broadly characterised by the fact that, for more than a decade, nations around the globe have been struggling to find a way forward economically. In some cases, nations have failed fi nancially, requiring bailouts and sending shock waves through the world’s markets.
At the same time, corporations – sometimes based within those struggling nations – are thriving. Many have values greater than the entire stock markets of certain countries. It was recently reported, for instance, that if you owned Apple and sold it, you could then go on to buy the entire Russian stock market and still have US$121 billion to spare.
Nations and states, many believe, are at least partly held to account on measures such as human rights, judicial systems, economic issues and environmental practices, by their neighbours and by international governing bodies such as the United Nations. This is necessary for the ongoing health and vitality of societies around the globe.
Corporations, however, have historically been expected to simply provide an annual financial report. But as they are now more powerful than many nations, and the emergence of the information age has brought new forms of wealth, corporations are understandably being expected to consider and measure other sustainability issues, as well as their impact on the world around them. But how do they quantify issues that are intangible?
Revolutionary new capitals
Enter integrated reporting, not an entirely new concept but one which is gaining traction both internationally and locally. This was evident in the wideranging discussion generated among Australian accountants when the IPA co-hosted round-table discussions with the International Integrated Reporting Council in October 2014.
A new book by Jane Gleeson-White, Six Capitals: The Revolution Capitalism Has To Have, shines more light on the complexities, challenges and the benefits that integrated reporting could offer. Traditional accounting looks towards the reporting of ‘fi nancial’ and ‘industrial’ capital. Integrated reporting adds another four: ‘intellectual’, ‘human’, ‘natural’ and ‘social and relationship’ capital. Gleeson- White really does see this as revolutionary. The book’s subtitle is: Can Accountants Save The Planet?
“The information age is responsible for the idea of human capital and intellectual capital,” says Gleeson-White, also author of 2012’s award-winning history of accounting, Double Entry.
“Why does a New-Age company like Twitter list for astronomical prices on the stock exchange, despite having no cash fl ow and few tangible assets?
Its wealth is in areas not accounted for in traditional fi nancial reports: ‘geeks and their software’, or human capital and intellectual capital.”
Gleeson-White adds that “the idea of social and relationship capital has come from external activists that have brought about such ideas as the sustainable reporting initiative. But they have yet to be integrated into the main financial report and bear on financial decisions.”
Holistic reporting
And this, says Gleeson-White, is where some of the real value of integrated reporting lies. It gets business departments talking to each other, finding out how the fi nancial decisions affect sustainability and vice versa, for example. “It’s a matter of getting all these people together and creating a report that refl ects the whole company and its ethos,” she says.
It also provides far clearer information for investors. “If you’re faced with a choice in investing in one of two beverage companies, one which clearly reports how it is caring for its water sources and another which doesn’t, you are likely to put your money into the company that is reporting on its most critical natural resource,” writes Gleeson-White. “Eventually, the value of integrated reporting will just become self-evident, I think.”
Depth and clarity
But how does an accountant, and in particular an auditor, put a value on something that can’t be measured?
The recent round-table discussions demonstrated that Australian accountants are certainly carefully considering the practicalities, before diving in. “We’re nervous about integrated reporting, but we don’t want to dismiss it,” says IPA representative Justin Reid, of GAAP Consulting. “Future-oriented information is hard to provide assurance on. It is not impossible, but it is problematic.”
Assurance practitioners, says Reid, will need to develop new frameworks in order to measure and analyse specific new capitals, such as relationships and manpower value.
“One solution might be a hybrid of reliance,” he says. “We might give assurance on the things we can [measure], the things that are factual or historical, and not on things we can’t measure.” Does it mean more work for accountants? Not according to Paul Druckman, who is leading the integrated reporting initiative, says Gleeson-White. And will fi nancial messages be lost among the other information? Absolutely not, she says. In fact, fi nancial information is still critical and the extra non-fi nancial information simply adds more depth to the picture. That is what integrated reporting offers, says Gleeson-White – clarity. “It is absolute common sense that corporations now have to start thinking of the way they impact the world,” she concludes. “They are the ones that change the world now, more than nations do. Nations are broke and confused and don’t know what’s going on, but corporations are flourishing.”
Just loved the title ... posted article below ... quite boring actually ... I can see myself now bounding out of my Ettalong Beach office with a Mariners cape ....
If you want to read it ... but just through I would share the title...
Can accountants save the world?
The big accounting idea known as ‘integrated reporting’ has attracted the attention of the profession’s best-known historian.
The current global economic period can be broadly characterised by the fact that, for more than a decade, nations around the globe have been struggling to find a way forward economically. In some cases, nations have failed fi nancially, requiring bailouts and sending shock waves through the world’s markets.
At the same time, corporations – sometimes based within those struggling nations – are thriving. Many have values greater than the entire stock markets of certain countries. It was recently reported, for instance, that if you owned Apple and sold it, you could then go on to buy the entire Russian stock market and still have US$121 billion to spare.
Nations and states, many believe, are at least partly held to account on measures such as human rights, judicial systems, economic issues and environmental practices, by their neighbours and by international governing bodies such as the United Nations. This is necessary for the ongoing health and vitality of societies around the globe.
Corporations, however, have historically been expected to simply provide an annual financial report. But as they are now more powerful than many nations, and the emergence of the information age has brought new forms of wealth, corporations are understandably being expected to consider and measure other sustainability issues, as well as their impact on the world around them. But how do they quantify issues that are intangible?
Revolutionary new capitals
Enter integrated reporting, not an entirely new concept but one which is gaining traction both internationally and locally. This was evident in the wideranging discussion generated among Australian accountants when the IPA co-hosted round-table discussions with the International Integrated Reporting Council in October 2014.
A new book by Jane Gleeson-White, Six Capitals: The Revolution Capitalism Has To Have, shines more light on the complexities, challenges and the benefits that integrated reporting could offer. Traditional accounting looks towards the reporting of ‘fi nancial’ and ‘industrial’ capital. Integrated reporting adds another four: ‘intellectual’, ‘human’, ‘natural’ and ‘social and relationship’ capital. Gleeson- White really does see this as revolutionary. The book’s subtitle is: Can Accountants Save The Planet?
“The information age is responsible for the idea of human capital and intellectual capital,” says Gleeson-White, also author of 2012’s award-winning history of accounting, Double Entry.
“Why does a New-Age company like Twitter list for astronomical prices on the stock exchange, despite having no cash fl ow and few tangible assets?
Its wealth is in areas not accounted for in traditional fi nancial reports: ‘geeks and their software’, or human capital and intellectual capital.”
Gleeson-White adds that “the idea of social and relationship capital has come from external activists that have brought about such ideas as the sustainable reporting initiative. But they have yet to be integrated into the main financial report and bear on financial decisions.”
Holistic reporting
And this, says Gleeson-White, is where some of the real value of integrated reporting lies. It gets business departments talking to each other, finding out how the fi nancial decisions affect sustainability and vice versa, for example. “It’s a matter of getting all these people together and creating a report that refl ects the whole company and its ethos,” she says.
It also provides far clearer information for investors. “If you’re faced with a choice in investing in one of two beverage companies, one which clearly reports how it is caring for its water sources and another which doesn’t, you are likely to put your money into the company that is reporting on its most critical natural resource,” writes Gleeson-White. “Eventually, the value of integrated reporting will just become self-evident, I think.”
Depth and clarity
But how does an accountant, and in particular an auditor, put a value on something that can’t be measured?
The recent round-table discussions demonstrated that Australian accountants are certainly carefully considering the practicalities, before diving in. “We’re nervous about integrated reporting, but we don’t want to dismiss it,” says IPA representative Justin Reid, of GAAP Consulting. “Future-oriented information is hard to provide assurance on. It is not impossible, but it is problematic.”
Assurance practitioners, says Reid, will need to develop new frameworks in order to measure and analyse specific new capitals, such as relationships and manpower value.
“One solution might be a hybrid of reliance,” he says. “We might give assurance on the things we can [measure], the things that are factual or historical, and not on things we can’t measure.” Does it mean more work for accountants? Not according to Paul Druckman, who is leading the integrated reporting initiative, says Gleeson-White. And will fi nancial messages be lost among the other information? Absolutely not, she says. In fact, fi nancial information is still critical and the extra non-fi nancial information simply adds more depth to the picture. That is what integrated reporting offers, says Gleeson-White – clarity. “It is absolute common sense that corporations now have to start thinking of the way they impact the world,” she concludes. “They are the ones that change the world now, more than nations do. Nations are broke and confused and don’t know what’s going on, but corporations are flourishing.”
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