it
While the concept of Integrated
Reporting is a relatively new one
and there are no universally agreed
standards yet, the South African
Integrated Reporting Committee (IRC)
is in the process of developing a local
standard.
Integrated Reporting will tell you that to consolidate all the relevant
information buried in e-mails, spreadsheets and word documents
scattered across databases in an organisation’s enterprise is
a mammoth task. It requires weeks of collating information,
verifying, updating and auditing and continuous buy-in from key
staff and top management before the final product is sent off to the
printers or uploaded onto the company website.
Importantly, it also requires an unwavering passion from relevant
stakeholders and top-level executives on the long-term sustainability of
the company through issues relating to corporate social investment and
not just the numbers.
However, despite many organisations’ best efforts, traditional
methods of compiling integrated reports are fraught with challenges.
Tight deadlines, stressful conditions and always under threat from
human error, manual Integrated Reporting becomes time consuming
and inefficient.
While the concept of Integrated Reporting is a relatively new
one and there are no universally agreed standards yet, the South
African Integrated Reporting Committee (IRC) is in the process
of developing a local standard. This standard is largely based on
King III and incorporates XBRL, or eXtensible Business Reporting
Language, a reporting format to drive an open, global standard for
business reporting and exchanging business information.
While XBRL delivers many benefits, especially improving the
comparability and consistency of business information to address
transparency concerns and deliver information in a universally
understandable format, the creation of this language has added yet
another challenge to the Integrated Reporting process. Although it
is not a legal requirement in South Africa yet, it is only a matter of
time. Any multinational organisation operating in South Africa and
listed on the New York Stock Exchange will have to implement this
type of reporting.
So how can organisations improve their business processes
internally with industry-standard metrics to ease the manual
burden of Integrated Reporting while developing financial and
sustainability strategies that will improve the bottom line?
Today, there are software solutions available that revolutionise the
continuous process of Integrated Reporting by combining sound and
legally-compliant business processes, controls and technology. However,
not all Integrated Reporting software is created equal. There are several
factors to look out for to reduce risk and enhance compliance.
The solution should be squarely focused on automation through
collaboration from a central, secure database repository that brings
together all the data, financial and non-financial, from multiple
sources across the enterprise. This methodology ensures that there
is only one single version of the documents in the reporting process,
which in turn guarantees greater data accuracy and compliance
with relevant governance regulations.
Contributors must be able to login and work securely in
a collaborative environment and participate in the document building process with a detailed audit trail as to what and when changes
were incorporated. This includes work flow and version control as
well as a fully-integrated XBRL tagging system that will comply
with not-so-distant future industry regulations.
Perhaps the most important and often overlooked factor is ease
of use. The reason why most Integrated Reporting tools fail is because
the interface is not familiar with the average employee, and despite inhouse training, a low adoption rate within an organisation still results.
In closing, while Integrated Reporting is a formidable task for
any organisation with the right financial reporting solution, it is
possible to automate this process. This not only reduces risk but
allows management to improve internal and external business
processes, and gives stakeholders the business critical information
to make better decisions through accurate data analysis that is
verified and audited. By Tiani Annandale ■
Tiani Annandale is a Senior Consultant at Cortell Corporate Performance Management. www.cortell.co.za.
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2013/10/15 12:03 PM