The-Accountant-Jul-Aug-2017

PEN OFF
INTEGRATED
REPORTING
By FCPA Jim McFie, a Fellow of the Institute of Certified Public Accountants of Kenya
At the Financial Reporting
Excellence (FiRe) gala
dinner on 24 October
2014, Mr Paul Ngugi, the
then acting Chairman of
the Kenya Capital Markets Authority
(CMA) welcomed guests and pointed
out that the CMA has been a promoter
of the FiRe Award from its inception
thirteen years earlier. As a promoter of
the FiRe Award, the aim of the CMA
was, and is, to strengthen the quality of
financial reporting in corporate Kenya by
enhancing the financial as well as the nonfinancial
elements of the annual report,
such as sound corporate governance
practices and sustainable corporate
social responsibility, in recognition of the
changing dynamics globally.
He then went on to speak about
Integrated Reporting. He pointed out that
the International Integrated Reporting
Council chaired by Prof. Mervyn King
has defined Integrated Reporting as
“a concise communication about how
an organization’s strategy, governance,
performance and prospects, in the context
of its external environment, lead to the
creation of value in the short, medium
and long term”. He added that the debate
on Integrated Reporting elicits emotions
and sometimes protests from companies
listed on securities exchanges in many
African nations because they are wary of
‘too much disclosure’ and the associated
compliance costs. Mr. Ngugi stated that
contrary to popular belief, Integrated
Reporting is not about giving more
information for the sake of it. Rather,
it is about the quality of reporting that
provides information to investors that
enables them to make informed decisions.
He claimed that, regrettably, not too
much effort goes into communication
with investors. Organizations choose to
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