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ACCA Strategic Professional · Advanced Audit and Assurance (International) · The assurance of sustainability

Zenith Foods plc is preparing its first integrated report using the International Integrated Reporting Framework. The finance director says the report should simply combine the financial statements with the separate sustainability report in a single document. Which statement best reflects the Framework's primary purpose for the integrated report?

The integrated report's primary purpose is to explain to providers of financial capital how the organisation creates, preserves or erodes value over time. It is not a bundle of existing reports, nor a substitute for financial statements, and other stakeholders benefit without being the primary audience.

  1. ATo explain to providers of financial capital how the organisation creates, preserves or erodes value over timeCorrect
  2. BTo replace the audited financial statements with a shorter summary
  3. CTo meet the information needs of all stakeholders equally, including regulators and customers
  4. DTo provide a detailed record of all environmental incidents during the year

Explanation

The Framework states 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 existing reports, and it does not replace the financial statements. The stakeholder option is wrong because other stakeholders benefit but are not the primary audience.

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