|[December 10, 2013]
IMA Outlines Actions to Transform Corporate Reporting
MONTVALE, N.J. --(Business Wire)--
In response to the International Integrated Reporting Council's (IIRC)
International Integrated Reporting (IR) Framework released
yesterday, professional management accounting association IMA®
(Institute of Management Accountants) has outlined several actions to
transform corporate reporting to better serve the public interest.
Follow this link for IMA's official comment letter: http://bit.ly/1kvT70L.
"IMA and the IIRC are in complete agreement that disclosures must be
improved in order to better inform investors and other key stakeholders
about the sustainable value creation capacity and capability of
enterprises," said Jeff
Thomson, CMA, CAE, president and CEO of IMA. "To realize the
benefits of IR, we must define our goals, adopt better technological
standards, embrace a learning and growth approach, market-by-market, and
shift our short-term financial focus. IMA also applauds the IIRC's due
process in reacting to issues from the April 2013 Consultation Draft
As IMA outlined in its original June
17, 2013 comment letter on the IIRC Framework Consultation Draft,
the following four issues must be addressed to reap the benefits of IR:
1. The end goal should not be to produce a single, integrated report. It
should be to motivate disclosures that better inform investors and other
stakeholders as to the sustainable value creation capability and
capacity of the organization. A good first step would be to clarify and
simplify existing disclosures. It may turn out that interlinked or
interconnected reports will produce a higher ROI for investors.
2. The ROI and "proof of concept" assessment of IR should shift more to
actual value delivery participants (e.g., business owners, business
managers, CFOs, preparers, investors, analysts) relative to value chain
observers and monitors (e.g., academics, consultants and regulators).
This will help develop the required market evidence.
3. A "learning and growth" approach should be taken to IR with tangible
step changes such as improving MD&A disclosures, motivating more concise
and informative financial reports including reporting on intangibles,
creating better connections to the overarching "strategy story" and
supporting new sustainability/ESG frameworks such as GRI (GRI issued the
next generation, "G4," of its guidelines on May 22, 2013 in Amsterdam).
Mandatory reporting is not recommended and history has often shown it
results in a social tax.
4. Technology enablement including XBRL/structured data standards could
play a role to potentially improve the cost/benefit of IR. In IMA's May
2, 2013 webinar with nearly 1,000 global participants, the responses to
the question "which is the most significant barrier to IR in your
organization" were: 13 percent weak external drivers; 21 percent lack of
appetite from the top; 20 percent strong organizational silos; 32
percent patchwork of IT programs/legacy systems; and 14 percent other.
Additionally, IMA believes that to create a sense of urgency in
corporate reporting, and to embrace a learning and growth perspective
market-by market, jurisdiction-specific working groups, including one in
the U.S., should be mobilized.
To access IMA's comment letters on other key legislative and regulatory
issues in Washington and globally, follow this link: http://www.imanet.org/about_ima/advocacy_activity.aspx.
About IMA® (Institute of Management
the association of accountants and financial professionals in business,
is one of the largest and most respected associations focused
exclusively on advancing the management accounting profession. Globally,
IMA supports the profession through research, the CMA®
(Certified Management Accountant) program, continuing education,
networking and advocacy of the highest ethical business practices. IMA
has a global network of more 20,000 CMA members in more than 100
countries and 300 local professional and student chapters. IMA provides
localized services through its offices in Montvale, N.J., USA; Zurich,
Switzerland; Dubai, UAE; and Beijing, China. For more information about
IMA, please visit www.imanet.org.
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