What is Integrated Reporting and What Are Its Benefits for Businesses in UAE?

Traditionally financial reporting has been focusing on providing only the financial information to the stakeholders, which primarily focused on the economic performance and how profitable the business was. The modern-day reporting framework has been evolving along with the change in the environment in general, which has also resulted in the stakeholder looking beyond the numbers. Now it’s the ripe time for the businesses to start to focus on integrated reporting, whereby they provide a clear picture to the stakeholders, which would include the further details regarding the environment, social, and governance concepts.

There has been a high demand for sustainability; the recent changes in the climate and the adverse effect of economic activities have resulted in a change in perspective of the stakeholders, where they have started to focus on non-financial aspects of the businesses as well. For a region like the UAE, where businesses flourish in a blink of an eye, the integrated report stands as a critical requirement whereby it can attract more investors from all over the world and, moreover, can increase the public confidence by providing the accurate picture of the operations of business through integrated reporting.

What is Meant by Integrated Reporting?

Integrated reporting is a process where, along with the financial metrics, non-financial metrics are also communicated to the investors and shareholders. It includes how the business or an organization makes the value, preserves it, and how it is destroyed throughout the process. It focuses on sustainability equally along with the financial performance. This process enables the stakeholders, such as the investors, customers, suppliers, government, etc., to understand how the value is created.

What is the Difference Between Traditional Reporting and Integrated Reporting?

Traditional reporting only included the financial information, mainly in the form of the balance sheets, statement of profit or loss, cash flows, etc. These mostly didn’t give emphasis on the environmental aspects and sustainability reporting.

Integrated reporting, on the other hand, provides more focus on sustainability and provides a clear view of the strategies implemented by the business and the value created based on the optimum utilization of the resources. It provides a clear picture of the impact of the operations of the organization on the environment.

Integrated reporting, hence, can be considered as a trump card whereby the goodwill of the businesses could be maintained and the confidence of the shareholders can be increased.

What Are the Benefits of Adopting Integrated Reporting for the Businesses in UAE?

There are multiple benefits that can be attained by the businesses if they implement integrated reporting within their organization. Some of the benefits include the following:

A clear insight to the investors: For the investors who are keen to know about how their investments are utilized, the integrated reporting provides them with a picture that is beyond numbers. Hence, the complete process of the business regarding the utilization of funds could be seen through the integrated report.

A competitive edge over other competitors: Having an integrated reporting system would enable the businesses in the UAE to get a competitive edge, as they can implement effective strategies, can get multiple benefits from the government authorities if there is no adverse effect on the environment, and much more.

Opportunities for improvisation: The businesses adopting the integrated reporting can conduct an internal check to ensure if the processes are effective and efficient. This could provide an opportunity to improvise over time and to keep a check on the risk and the resources. The integrated reporting would also assist in detecting the loopholes, if any.

Key Aspects to Consider When Setting Up an Integrated Reporting Framework

The key aspects to keep in mind while setting up the integrated reporting would include:

• Implementing a stringent framework
• Having clear-cut objectives and materiality thresholds
• Convincing internal management and human resources
• Proper and clear communication with the stakeholders

How can CDA Assist in Implementing the Integrated Reporting?

At CDA our team provides the personalized assistance to the clients in adopting the integrated reporting framework by providing all the guidance and insights on the performance, strategies, value creation, etc. The businesses in the UAE can approach CDA to get integrated reporting implemented in their organization, as the professionals in the team would enable your businesses to analyse the impact of their activities on the environment and provide a three-dimensional view as per the economic performance, sustainability, and governance.

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Jijo Saji

Senior Auditor

Senior Auditor with over 10 years of experience in auditing, taxation, and financial reporting. Proven expertise in statutory audits, VAT compliance, and advisory services across diverse industries.