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Accountants at JSE-listed companies in South Africa need to brace themselves for the introduction of a range of new reporting standards over the next two to three years.
Constant regulatory and legislative change is the new status quo for stock exchange listed companies everywhere in the world, and South Africa is no exception. Accountants and financial directors at JSE-listed companies need to start preparing themselves for the next wave of changes in reporting standards, with a set of major updates to International Financial Reporting Standards (IFRS) due to take effect in 2013.
What's more, they are also coming under pressure to start getting serious about integrated reporting as envisaged by the third King report on corporate governance (King III). We are also starting to see more discussion about the potential benefits of the adoption of XBRL (extensible Business Reporting Language) in South Africa.
Taken together, these changes have profound implications for business processes and workflows at many JSE-listed companies. Let's look at the three major issues in turn, starting with the drive towards integrated reporting.
Beyond the bottom-line
Worldwide, we are seeing a major drive towards integrated reporting as regulators, stock exchanges and shareholders demand to see sustainability information in companies' financial reports. On the international front, the movement towards integrated reporting is being driven by the International Integrated Reporting Council (MRC), which is striving towards the creation of a globally accepted standard for integrated reporting.
The IIRC is working to create a framework for integrated reporting worldwide, which brings together financial, environmental, social and governance information in a clear, concise, consistent and comparable format.
In South Africa, the King III report strongly recommends the adoption of integrated reporting as a best practice. The King Commission calls on the board to ensure that the organisation has appropriate systems and processes to produce a report that gives a complete picture of the company's financial...