With deep expertise in financial accounting and reporting and, increasingly, sustainability reporting, accounting firms and associations have a critical role to play in the integrated reporting movement. Possessed of the capabilities and global scale to conduct audits of the world's major corporations (whose combined market cap is close to 100% of equity held by investors), the Big Four accounting firms—Deloitte, Ernst & Young (E&Y), KPMG, and PricewaterhouseCoopers (PwC)—are especially important. The integrity of the world's capital markets depends upon audits that ensure the quality of the information investors are using to make decisions. To the extent that investors—and ultimately regulators—believe that this information can be more effectively delivered through integrated reporting than separate financial and sustainability reporting, companies will depend on their auditor to help them issue reports with the appropriate level of assurance. But these firms must be less timid. They must become stronger advocates for all aspects of integrated reporting, including the necessity for integrated assurance.

While the Big Four are involved in the movement, we believe they have not been sufficiently active in their integrated reporting advocacy out of concern that their clients would perceive this to be naked self-interest. The cynic would say that the accounting firms support integrated reporting because it represents a potentially large new source of revenues from audit and advisory services. Leaving aside the obvious irony that companies unabashedly pursue their own economic self-interest, we recognize that, as a profession, accountants must be held to a higher standard of placing their clients' interests before their own. But professions are also expected to provide the best advice to their clients. This includes points of view on issues they think their client should know about—even if the client is not interested in hearing the idea or does not even like it.

When it comes to the audit function, the client situation is complex. The "real" clients for an audit are investors, yet the practical reality remains that the company they are auditing selects and pays the auditor, making the company a client as well. Consequently, if the accounting firms, in their professional judgment, firmly believe that integrated reporting is beneficial to both investors and the integrity of the capital markets—and their actions so far suggest that they do—they should not be bashful in proactively bringing this point of view to their company clients and investors. Since adopting integrated reporting is still a voluntary company decision that can be executed with varying degrees of depth, the company can decide whether to retain its accounting firm (and other advisors) to help them start the journey or not. No company is being forced to pay for a service it does not want. It is the responsibility of the company's auditor to make sure its client is sufficiently informed about integrated reporting, including its still-uncertain costs and benefits, in order for the company to make an informed decision about this new management practice.

Recommendation Number Three: The Big Four firms should work with other accounting firms and professional accounting associations to establish a proactive campaign to create awareness and understanding of integrated reporting among their clients and to develop assurance standards for integrated reporting.

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