INTEGRATED FINANCIAL REPORTING – STEP FORWARD IN SATISFYING THE INFORMATION NEEDS OF STAKEHOLDERS?!

The turbulent beginning of the 21st century, characterized by, among other things, financial scandals related to the operations of several well-known corporations, as well as the world economic crisis imposed the need for companies to provide stakeholders (external and/or internal), and especially current and potential investors, with additional information related to broader social and environmental aspects of their business. For this purpose, the concept of corporate social responsibility and integrated reporting has been developing for the last thirty years, as a tool that should meet the growing needs for financial and non-financial information. The most important accounting authorities (Financial Accounting Standards Board – FASB and International Accounting Standards Board – IASB), as well as the corresponding bodies within the European Union, are trying to regulate this matter with documents (codes, initiatives, directives, recommendations, etc.) with the aim of defining rules that will help the management of corporations to meet the growing information needs of stakeholders. Through a critical analysis of the positive and negative sides of the mentioned documents, comparing them with the existing regulations in the Republic of Serbia, we determined that the proponents of the concept of integrated reporting face challenges similar to those that characterize the process of standardization, harmonization and convergence of international accounting regulative (IAS/IFRS). Namely, there is an evident need for integrated reporting to be part of the annual financial report, but the structure and information that should be contained in those reports differ, which reduces their usability. Even Directive 2014/95/EU, which represent the only document on which the expert public agreed, failed to overcome the mentioned problems, so the need to revise this document is a confirmation that additional efforts are needed to increase the comparability, reliability and relevance of these reports. On the other hand, the adoption of IAS/IFRS that would deal exclusively with integrated reporting could contribute to the further development of this concept, because the inclusion of environmental accounting in the provisions of several current IAS/IFRS represents a solid basis for the creation of quality information on business sustainability, but their further shaping and publication depends on the degree of corporate awareness in that field, specific regulatory requirements of individual countries, as well as the level of accounting culture, which in our conditions is not at an enviable level. There is also a fear that too long harmonization, similar to IAS/IFRS, will create a kind of "vicious circle" in which the possibility or need to revise one of the related documents or possibly an accounting standard will be practically impossible due to their interdependence and intertwining with the provisions of other regulations.