EVOLVING OF REPORTING FRAMEWORKS - ISSUE OF SUSTAINABILITY OR REGULATORY BURDEN
DOI:
https://doi.org/10.32689/2523-4536/69-13Keywords:
integrated reporting, sustainable reporting, Environmental, Social and Corporate Governance (ESG), IFRS, IFRS Sustainability Disclosure Standards, XBRLAbstract
Our literature review demonstrates that based on the diversity of types, forms and requirements for reporting, organisations often need help to develop a proper management approach to prioritise and enforce all provisions and how much resources should be allocated to maintain and ensure the reporting function. In recent decades, an increasing shift from pure monetary-focused reporting (financial statement) to the reporting initiative with a deep emphasis on non-financial indicators, such as social or environmental values. As a result, integrated reporting embodies an innovative approach to business reporting, especially by Public Interest Entities. In addition to financial aspects, the integrated report includes material information about environmental, intellectual, human, social and natural capitals. The difficulty lies in that the reporting entity should make its own decisions regarding the detailing and disaggregation of the information included in the reporting without causing a significant loss of competitive advantage through the disclosure of sensitive information. An entity should consider what advantage competitors may derive from the information in the integrated report and balance this with the need for disclosure. There are growing challenges of greenwashing reporting practices and information overload. For such a huge variety of reports and information, inaccurate data and technology could lead to distorting operational decisions, and instinct rather than insight prevails in the management approach. So, it's crucial to establish prominent policies and procedures for managing big data. We also give a detailed overview of the interrelation between different types of reporting and relevant conceptual frameworks. In this discussion, it is presented key distinctions between the basis of such frameworks with stressing their particularities. For example, it could be argued that a principle-based conceptual framework gives more prominent results. Meanwhile, such an approach usually led to the application of significant managerial judgments, with the inherent risk of bias and signs of window-dressing.
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