Roger Simnett, Scientia professor of accounting at the Australian School of Business, and member of the IIRC’s technical task force, has conducted research into the importance of integrated reporting, which he says provides a significant opportunity for NFP companies.
“Demand for integrated reporting is coming from the private sector, particularly large institutional investors such as pension funds. The irony is that while integrated reporting will be a good thing for the private sector, it will be a game changing development for NFP companies that have never been well catered for under the current reporting model.
“When I am looking to assess the value of a social business, I’m only marginally interested in how much profit the company made or how it made that profit. Social businesses are not established to make a profit so to assess their value according to a financial reporting model is unhelpful. Integrated reporting allows funders and supporters to measure all aspects of company value such as strategy, management, social good and governance.”
The research shows that the current regulatory burden on the limited resources of NFP companies in Australia is significant and in need of streamlining and reform.