The Indiana CPA Society has released its first integrated report, becoming the first state CPA society in the U.S. to prepare its own integrated report.

INCPAS produced the report to serve as an example for its members, their clients and employers. Integrated reporting is a new form of comprehensive business reporting that incorporates all aspects of business performance in a concise report format.

The movement toward integrated reporting worldwide has been spearheaded by the International Integrated Reporting Council. The IIRC first released a discussion paper in 2011, then a draft framework for integrated reporting in 2012, and finally the final version of the framework in late 2013.

“An integrated report really tells the whole story,” said INCPAS chairman Kent Williams, a business professor at Indiana Wesleyan University in Marion, Ind. “It’s so much more than an annual report. There is a significant benefit for any organization to go through the process of preparing an integrated report, and the finished product is beneficial for those leading and investing in the organization. In presenting the whole picture, an organization can elevate opportunities and identify blind spots. By examining skills and competitive advantage, it can cause an organization to act and react. It’s definitely a thought-provoking read.”

Defined simply as the language for sustainable business, integrated reporting is recognized by the symbol . According to the IIRC, “ is a process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation.”

The integrated report itself is described by the IIRC as “a concise communication about how an organization's strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.”

Integrated reporting aims to accomplish these four things: improve the quality of information available; promote a more cohesive and efficient approach to corporate reporting; enhance accountability and stewardship; and support integrated thinking, decision-making and actions that focus on value creation.

Integrated reporting is beginning to become more popular abroad, particularly in Europe, but it has yet to catch on in the United States.

“In many ways, there’s the rest of the world and there’s the U.S.,” said IIRC CEO Paul Druckman in an interview with Accounting Today in March. “In the rest of the world, I describe integrated reporting as being on a rollercoaster and it’s quite hard. In many ways, we’re just trying to keep it on its rails rather than driving. It’s a downhill rollercoaster. In the U.S., it’s quite a different story. There’s starting to be some understanding, but one of the biggest problems we have in the U.S. is to get the right understanding of what we mean by integrated reporting because a lot of people just think it’s more. We’re talking about an evolution in corporate reporting, and I don’t think that message has gotten across.”

There are many factors that have led to the emergence of integrated reporting, INCPAS noted. First and foremost is the increasing pace of change. Complexity and globalization are issues as well. Additional factors are that traditional numbers found in other business reports don't tell the full story, and that opinions about business performance need to be enhanced.

INCPAS began studying integrated reporting in early 2012, and formed a task force that explored its applications for both the society and the CPA profession. Although the process of integrated reporting and the compilation of an integrated report involves professionals outside of the CPA profession, CPAs were viewed as the ideal professionals to lead the effort. The task force's work resulted in a white paper.

Integrated reporting involves much more than financial reporting, INCPAS noted, but the task force agreed that CPAs are well equipped to collaborate with others and incorporate their work into these new comprehensive reporting documents. Among the recommendations offered by the task force were the need for INCPAS to provide educational opportunities about integrated reporting for its members and to advocate for the implementation of integrated reporting. The white paper, released in late 2012, is available on the Society's website by clicking here.

"Integrated reporting is the future of business reporting," said INCPAS vice president of finance Jenny Norris, who was responsible for compiling the report. “In representing and supporting the CPA profession in Indiana, we thought it was appropriate for the Indiana CPA Society to take this first step to help our members become not only more familiar with their professional association, but also to become more aware of integrated reporting and its future in the business world.”

The INCPAS integrated report begins with assurances, the Society's mission, vision and values, and messages from the INCPAS chairman and president and CEO. It then provides brief descriptions of who the Society and who its members are, how we are governed and how we do what we do. It then goes into detail about the INCPAS business model, who we are accountable to, and what's happening in our and our members' environments. The report concludes with the Society's strategy, risks and opportunities, financial performance and future outlook.

The 30-page report is available on the Society's Web site at this link, and will be promoted to the INCPAS membership through various print and electronic communications.

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