Право/ Административное и финансовое право
Saktaganova Indira Sovetovna,
Associate Professor, Department of Theory and History
of State and Law, constitutional law, Candidate of Law
Eurasian National University of L.N. Gumilyov, Astana, Kazakhstan
Kunanbaeva Ayzat Jaydarhanovna,
Magistrate of psychological sciences
Eurasian National University of L.N. Gumilyov, Astana, Kazakhstan
Nagayeva
Elmira Zarifovna,
The
3rd year student of the specialty jurisprudence
of
the Eurasian Humanitarian institute
Astana,
Kazakhstan
Corporate and Integrated Reporting: A Functional
Perspective
Now, the factor of inflation is the
constant phenomenon of economic life of many countries of the world and,
including, Kazakhstan. The corporate reporting created without an inflationary
factor doesn't provide adequate reflection of business processes and
possibility of adoption of reasonable economic decisions by users. Information
of the corporate reporting prepared on the basis of traditional accounting
estimates disorients the management of the organizations at an assessment of
financial resources and production potential[1].
Corporate reporting plays two functions.
The first is an "information function" that enables counterparties,
such as investors, employees, customers, and regulators, to enter into an
exchange of goods and services under specific terms. Companies also benefit
from the information function by comparing their performance against peers,
thereby informing internal resource allocation decisions[2]. The second is a
"transformation function," the result of a company engaging with
stakeholders to get their input on the company's resource allocation decisions.
The integrated reporting – new trend in
the world of finance. The main tendency of development of the corporate
reporting is transition from financial statements in narrow sense to the
integrated reporting now[3].
Now for many companies over long-term
problems of improvement of life of society short-term benefits often prevail,
starting mechanisms of business behavior, more aggressive concerning risks, and
models of decision-making. It can't but result in market instability of such
scale which threatens the whole branches and economies of the countries. One of
aspects of criticism of the real model of the corporate reporting consists that
now in it enough attention to such factors as risk, strategy, supervision and
stability of a business model of the enterprise isn't paid.
The purpose of the present is creation
of the integrated reporting which would be structured round strategic tasks of
the organization, its model of business and corporate management. Tasks of such
concept are formulated as follows:
a)
To satisfy information needs of long-term investors,
having shown decision-making consequences in the long term.
b)
To reflect interrelation between factors of ESG and
financial factors in decision-making influencing long-term results of activity
of business, having made clear and transparent communication between stability
of business (sustainability) and its economic value (economic value).
c)
To provide a format of the reporting under ESG factors
for systematic inclusion in decision-making process.
d)
To displace accent in indicators of an assessment of
results of work of business with short-term on the long-term.
e)
To reflect in the reporting it is more than
information which uses management for daily management of operations.
The integrated reporting covers large
volume of various information which allows the interested users to draw a
conclusion on results and prospects of development of the company, influence of
its activity on environment and society, and objectively to estimate these
results and prospects in wider context of stability of development of society
in general[4].
The authors argue that integrated
reporting is more likely to perform effectively these two functions than
separate financial and sustainability reporting. Moreover, as the authors
argue, these two functions vary in terms of how important the role of
regulation is. Regulation and standard setting is likely to improve the
information function but could well impede the transformation function. If
regulation is too prescriptive and "rules-based," the risk is that
integrated reporting becomes more of a compliance exercise[5].
Prospects of application of the integrated
financial statements is that the circle of users extends and the reporting
becomes more informative, transparent. Any company has opportunity to draw
attention of potential investors, investors, creditors by submission of the
reporting in open access, disclosures of mission of the company and strategy of
its development, the planned results and events, achievements, policy of the
company in various fields of activity — economic, social, ecological, cultural.
Thus, the integrated reporting is a new
tool which will provide effective interaction of the companies with the
financial markets and a wide range of the interested users in the near future,
allowing to give actual information on corporate strategy, conditions in which
the companies work, and also risks which subjects of managing at achievement of
the strategic objectives face and, as a result, to estimate stability of
business. The
integrated reporting will allow to level the conflict of interests of users for
which there is the specific information on the company necessary for different
adoption of economic decisions. It is necessary to emphasize that the
conceptual basis of the integrated reporting is almost identical to a
conceptual basis of financial statements that promotes achievement of its
purpose, without changing the basis. Nevertheless, has to pass enough time that
economic entities estimated importance of such reporting, and, above all could
adapt approaches to drawing up the reporting which positively would be
perceived by all interested users.
Key concepts
include:
· Investors need a better understanding of how companies
are managing the relationships between financial and nonfinancial performance.
· Separate financial and sustainability reports are no
longer adequate for performing either the information function or the
transformation function.
· Companies need integrated reporting in order to make
sure that their corporate reporting process effectively performs the
information and transformation functions.
In this paper, we present the two primary
functions of corporate reporting (information and transformation) and why
currently isolated financial and sustainability reporting are not likely to
perform those functions effectively. We describe the concept of integrated
reporting and why integrated reporting could be a superior mechanism to perform
these functions. Moreover, we discuss, through a series of case studies, what
constitutes an effective integrated report and the role of regulation in
integrated reporting.
The list of using
literatures:
1. Maheeva, IV Information technologies in professional activity.
2. Trifonov, V. Information Systems and Technologies in Economics and
Management.
3. Financial innovation: international experience / M. C. Lychagin, B.
Scott-Quinn, B. I. Suslov. - Novosibirsk: Nauka, 1997.
4. E. Jami. Problems of
optimization of resource support R & d in the current economic conditions
// Consultant Director, No. 5 (137), 2001.
5. Isaev, GN Information systems in economics.