While audit and validation processes for financial reporting have been in place for a very long time, they are largely still immature when it comes to nonfinancial information. As a result, report producers and consumers alike are justifiably suspicious of the reliability of the nonfinancial information they report on and use. IT can provide a greater degree of comfort regarding the quality of information being used in integrated reporting by ensuring that there is a single source of truth—that all who consume information inside the company acquire it from a single, systemic source, like a relational database, a data warehouse, or virtual cloud solution. This will reduce errors like the incorrect transposition of numbers or the loss of connection between narrative reporting and the underlying data. IT solutions that deliver a single source of truth are available, but their implementation requires a good alignment between business and IT processes inside the company.


The key to analysis is to use information from internal and external sources to link the content elements—such as strategy and resource allocation, governance, performance, and outlook—in a meaningful way. IT tools for analysis are becoming increasingly available, many for a low cost or even free. Earlier analytical systems focused on transactional data, and subsequent ones then incorporated information tucked away in relational databases.5 The advent of big data, however, has catalyzed the development of more sophisticated analytical tools that can use both structured and unstructured data. Discussed below, these tools can generate new insights on how different pieces of information can be understood and how they might be related to each other.

Audience Filtering

While integrated reporting is holistic by nature, not everyone needs all information all the time. As discussed in Chapter 5, what is regarded as material by each audience varies widely. Both the producer and user of information can filter it and, in both cases, numerous IT tools are available for doing so. However, filtration processes certainly need to mature as most companies using integrated reporting have not yet reached this level of sophistication in their integrated thinking processes. When availing themselves of filtering capabilities, audience members should also be conscious of the fact that information they filter out may be related to information they think is material, so users should approach the process with a certain degree of judgment.

Publishing to Internal Audiences

Once the information has gone through a "materiality filter," it needs to be published for the relevant audience. Currently, a number of potential audiences for integrated reporting information are found inside the company, including line management and the strategic planning, performance monitoring, risk, sustainability, corporate reporting, and investor relations functions. If the information needed by each audience is available in systems or formats that enable portability, then each audience can choose to view and work with the information that is delivered to them using tools appropriate for their task. The challenge for those responsible for the provision of IT is to ensure that any time the users of integrated reporting information massage it, their action does not abstract the information from the context that gives it meaning. The IT system also needs to preserve audit trails, keep track of version control, and maintain links to underlying data sources.

Publishing to External Audiences

For external audiences, the challenge for integrated reporting is to ensure that the important content elements are crafted and honed out of the process of integrated thinking before they are delivered to external consumers of the company's reports. While traditional reports are delivered on pieces of paper (or as PDFs, the digital equivalent of pieces of paper), IT enables more powerful methods of report delivery and consumption. Already, companies are using websites to deliver digital reports that enable role-based or interest-based consumption. While concision is an important guiding principle of integrated reporting, IT can be used to supplement the information in the integrated report by providing metadata (such as through Extensible Business Reporting Language (XBRL)),6 context, and access to underlying data sets for those who are interested in more detail.

< Prev   CONTENTS   Next >