Reporting evolves: the CPA's journey to integrated reporting: new skills needed.

• Author: Monterio, Brad J.
• Position: Professionalissues

things come along periodically with the power to fundamentally transform the accounting profession, requiring CPAs to learn new skill sets. That next something is integrated reporting, which will require CPAs to become proficient in areas beyond their traditional core skills (e.g., accounting, auditing, U.S. GAAP) to include new measurement. controls and reporting around environmental, social and governance (ESG) practices.

ESG practices are fundamental elements of integrated reporting and will require CPAs to become knowledgeable with frameworks for carbon disclosure, greenhouse gas emissions, human rights and labor practices, stakeholder engagement and much more.

CPAs have probably heard about concepts like sustainability or green reporting perhaps even ESG reporting. They may think these terms are interchangeable. The market is certainly guilty of mixing these terms, perhaps from a misunderstanding of what they each really mean. So what is integrated reporting and how will CPAs need to evolve their skills to become proficient at it?

Integrated Reporting?

Professor Robert Eccles of Harvard Business School, a global visionary for integrated reporting and author of several books, including "One Report: Integrated Reporting for a Sustainable Strategy," defines it this way:

"The publication in a single document of the material measures of financial and non-financial performance and the relationships between them. It also involves leveraging the Internet and the company's Web site to pride more detailed financial and non-financial information of interest to particular stakeholders, including shareholders, alone with tools for analyzing this information. Finally; it's about increasing dialogue and engagement with all stakeholders. It's as much about listening as it is talking."

So what's new here? For one thing, the integration of non-financial performance measures and practices into one report. And, to produce a truly integrated report, it doesn't end there. Organizations need to integrate ESC practices into their overall business strategies, engage with a wider group of stakeholders, determine material and nonmaterial factors, manage complexity of their disclosures and determine completeness of the information that is included in the report.

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And don't think that this is just another trendy movement. Integrated reporting is here now and it's not a question of if it will impact CPAs. but zchen, so it's important CPAs master this new skill set soon.

For further convincing-, CPAs can look to the International Integrated Reporting Committee, which released a draft framework for integrated reporting Sept. 12. The proposal, "Toward Integrated Reporting-Communicating Value in the 21st Ccntury," is available at ivwiv.tliellliC.om Organizations involved include the AICPA, International Federation of Accountants and other accountancy organizations. CPAs can bet that if those groups are involved, this is something big. Reporting is evolving and change is coining.

Integrated...