ACCA Strategic Business Leader (SBL) Practice Exam

What is the primary purpose of integrated reporting?

1. Compliance with regulatory requirements

2. Enable effective board-level decision making

3. Enhance competitive analysis

4. Focus solely on financial outcomes

The correct answer is: Enable effective board-level decision making

Integrated reporting primarily aims to enable effective board-level decision making by providing a comprehensive view of an organization’s performance, both financially and non-financially. This approach integrates various dimensions of a company’s operations and sustainability into a unified report, which helps managers and board members assess the company's strategy, governance, and performance beyond traditional financial metrics. The outcome of integrated reporting is to support decision-making processes that take into account long-term value creation and sustainability. By presenting connected financial and non-financial information, integrated reporting facilitates a holistic understanding of how resources are utilized and the organization’s impact on social, environmental, and economic contexts. This information is crucial for board-level discussions, strategy development, and alignment with stakeholders' interests. While compliance with regulatory requirements, competitive analysis, and a focus on financial outcomes are relevant aspects of corporate reporting, they do not fully encapsulate the primary aim of integrated reporting. Rather, integrated reporting transcends these objectives by promoting a broader and more strategic approach to reporting that supports long-term decision-making and stakeholder engagement.