IFAC and IIRC set out a vision for accelerating integrated reporting assurance

Jay Owen Reforming Global Finance, SRI/ESG News, Beyond GDP

IFAC and IIRC set out a vision for accelerating integrated reporting assurance

 

As an increasing number of businesses around the world implement integrated reporting as a route to long-term value creation and sustainable development, the demand for assurance services on such reports is expected to rise accordingly. To help meet this demand, and to increase confidence in integrated reporting, the International Federation of Accountants (IFAC) and the International Integrated Reporting Council (IIRC) today, 26 February 2021, are launching a new joint initiative, Accelerating Integrated Reporting Assurance in the Public Interest (‘the initiative’).

The initiative recognizes that new thinking is required to determine what comprises integrated report assurance and how to best deliver it, given integrated reporting’s broad and forward-looking focus on value creation. The initiative, which will be rolled out in installments, is designed to heighten awareness of key issues, drive constructive conversation with and among key stakeholders, and encourage providers and users of assurance services in particular to lend their voices to the effort.

The first installment is released today and sets out what integrated reporting assurance involves for organizations, auditors, and others. This installment also addresses the difference between the two types of assurance – limited and reasonable – and what is required of auditors and organizations to strive for reasonable integrated reporting assurance.

Feedback on the initiative and the first installment can be sent to [email protected]. All comments are welcome, especially those that address:

  • perceived or actual opportunities and challenges for progressing integrated reporting assurance
  • areas in which additional thought leadership and guidance would be useful for organizations, auditors and assurance providers.

Commenting on the initiative, Charles Tilley, Chief Executive Officer, IIRC, said, “We believe the move toward assurance of integrated reports, particularly the move from limited to reasonable assurance, should lead to improvements in the quality of integrated reports and underlying business practices, and enable investors and other stakeholders to have more confidence in the information reported about the business and its resilience.”

Tjeerd Krumpelman, Global Head of Advisory, Reporting & Engagement, ABN AMRO N.V., said, “We decided a few years ago to obtain cover-to-cover independent assurance, based on the International <IR> Framework, from our financial statements auditor, EY, on our 2017 Integrated Report. We were a groundbreaker in this regard, and encourage all other integrated reporters to do the same. We believe this pathway has not only enhanced the credibility of our report and provided stakeholders with increased confidence, but we also received valuable reporting and process improvement recommendations. Our next step is to move from limited to reasonable assurance for parts of our integrated report, and to obtain assurance on other non-financial disclosures, such as our Human Rights report, because it makes good business sense.”

Kevin Dancey, Chief Executive Officer, IFAC, said, “Integrated reporting assurance, and indeed providing assurance on all non-financial (including sustainability) information, is a critical element in the future role of accountants, requiring them to apply their professional expertise to assurance engagements that enhance the credibility of corporate reporting. Practice needs to develop quickly in this immature part of the reporting and assurance world, particularly to provide confidence in narrative and forward-looking information. Professional accountants, as preparers and assurance providers, are uniquely qualified to help lead the way in this important area.”