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ACCA Strategic Professional · Advanced Performance Management · Sustainability

Zenith Foods plc is preparing its first integrated report under the International Integrated Reporting Framework. The finance director says the report should simply combine the financial statements and the sustainability report into one document. Which statement best describes the core purpose of an integrated report?

The primary purpose of an integrated report is to explain to providers of financial capital how the organisation creates, preserves or erodes value over time. It is a concise communication about strategy, governance, performance and prospects, not a mere merging of financial and sustainability reports.

  1. ATo explain to providers of financial capital how the organisation creates, preserves or erodes value over timeCorrect
  2. BTo satisfy all stakeholders' information needs equally through exhaustive disclosure
  3. CTo replace the statutory financial statements with a single narrative document
  4. DTo report only on environmental impacts measured in monetary terms

Explanation

The Framework states that the primary purpose of an integrated report is to explain to providers of financial capital how an organisation creates value over time. It is not a combination of two reports, nor a replacement for financial statements. Option B is wrong because the primary audience is providers of financial capital, although others benefit.

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