How to pass SBL (part 4)

October 2024

Top tutor Chris Cain delves into integrated reporting in his latest instalment on the Strategic Business Leadership exam,

Integrated Reporting (IR) is an important topic on the SBL syllabus and the detailed study guide states that candidates need to be able to “examine how the audit of integrated reports can provide adequate assurance of the relevance and reliability of IR to stakeholders”.

The notes below, produced by PASS-SBL, will help with answering about how the audit of IR reports can provide adequate assurance of relevance to stakeholders.

Understanding stakeholder expectations

Audit role: Auditors assess how well the organisation understands the expectations and needs of its stakeholders. This involves reviewing stakeholder engagement processes and mechanisms.

Relevance assurance: By understanding stakeholder expectations, organisations can tailor the content of the integrated report to meet the needs of the intended audience, ensuring that the information provided is relevant.

Consistency and alignment

Audit role: Auditors examine the consistency and alignment of information within the integrated report and with other communications from the organisation.

Relevance assurance: Ensuring that the report provides a coherent and aligned narrative reinforces the relevance of information by presenting a clear picture of the organisation’s performance and impact.

Balance and completeness

Audit role: Auditors assess whether the integrated report provides a balanced view and is complete in addressing key issues relevant to stakeholders
Relevance assurance: The audit process ensures that the report avoids bias, presenting a fair and complete representation of the organisation’s economic, environmental, social, and governance aspects. This contributes to the relevance of the information presented.

Future outlook and prospects

Audit role: Auditors examine how well the integrated report addresses the organisation’s future outlook and prospects.

Relevance assurance: By assessing the credibility of future-oriented information, the audit ensures that stakeholders are provided with relevant insights into the organisation’s strategic direction and potential future opportunities.

Quality of reporting processes

Audit role: Auditors evaluate the processes and controls in place for preparing the integrated report, including data collection, validation and reporting mechanisms.

Relevance assurance: A robust reporting process enhances the reliability of the information presented, contributing to stakeholders’ confidence in the relevance and accuracy of the disclosed information.

Stakeholder feedback

Audit role: Auditors may consider feedback from stakeholders obtained during the engagement process.

Relevance assurance: By incorporating stakeholder feedback, organisations can demonstrate responsiveness to stakeholder concerns and improve the relevance of the integrated report over time.

Comparability

Audit role: Auditors assess how the organisation’s performance is presented in comparison to previous periods.

Relevance assurance: Comparability enhances the relevance of the information by providing context and allowing stakeholders to assess the organisation’sperformance against its own history.

• Chris Cain is an approved trainer with PwC Academy