By Aucky Pratama

Even as <IR> is gaining traction in various jurisdictions around the world, its adoption in ASEAN is still limited mostly to larger companies in selected jurisdictions such as Malaysia, Singapore, and the Philippines. Representatives of early adopters from Malaysia shared insights into their <IR> journey, highlighting key challenges and what is needed to adopt and implement the framework, whilst the International Integrated Reporting Council (IIRC) and CPA Australia representatives provided updates on <IR> and its revised framework.

Why <IR>?

With 52% of the poll respondents stating their lack of knowledge in <IR>, it was clear that although <IR> is adopted by companies in more than 70 economies around the world, ASEAN stakeholders are still warming up to the idea of <IR> as a framework for organisations to communicate a comprehensive and coherent story of their value creation journey.

However, the interest is definitely there, as 72% of the respondents believe that <IR> is aligned to the opportunities and needs in their market. With 15% of the respondents already adopting and more than 50% planning to adopt <IR> in the near future, ASEAN stakeholders could take a page from success stories such as DBS Bank in Singapore, Ayala Corp in the Philippines, and KPJ Healthcare Berhad and Sunway REIT Management Sdn Bhd in Malaysia.

“Our understanding of value is changing, as intangibles become more prominent in defining the value of a business. With the world today wanting to know more about business’ value creation and its governance, a new measurement matrix and reporting framework are needed to better convey the real value of a business,” said Jonathan Labrey, Chief Strategy Officer of the IIRC. He highlighted how the COVID-19 pandemic has forced us to rethink the way we collaborate – breaking silos and promoting integrated thinking in operating a business and its reporting to stakeholders.

<IR> is an important management tool that enables management to better understand its use of capitals for value creation. More importantly, it is a platform for businesses to better communicate with their stakeholders about their value creation journey.

Taking the first step

“It needs to start with a champion, or champions. This could be a member of the Board who feel strongly about <IR>” said Christina Foo, Chair of Audit Committee at KPJ Healthcare Berhad, one of the early adopters of <IR> in Malaysia. She highlighted the importance of building awareness and acceptance towards the benefits and value propositions of adopting <IR>, whilst harnessing the desire for management to accept the fundamental change in mindset.

Boards need to understand the potential resistance that may come from mid-management because integrated thinking has to take place to a certain extent for <IR> to be implemented effectively. A change in mindset from working in silos (silo mentality) to integrated thinking is a fundamental part of the <IR> journey that needs to be done with support from everyone in the organisation. With more useful information presented in <IR>, the organisation also needs to ensure the integrity of information presented to their stakeholders.

“Businesses need to start with the premise of transforming its corporate reporting, and continuously improve. It is a journer” said Irene Sin, Chief Financial Officer at Sunway REIT Management Sdn Bhd, another early adopter of <IR> in Malaysia. As part of the management, she recognises the challenge in getting everyone onboard. It is about fostering a long-term value reporting process, focusing on what is important for the business. She encouraged businesses to start their journey early and improve along the way.

Why accountants?

Quoting Peter Bakker, CEO of the World Business Council on Sustainable Development: “Accountants will save the world”, Dr. John Purcell, Policy Adviser, Environmental, Social and Corporate Governance for CPA Australia believes accounting bodies have a public interest obligation to promote better reporting. He highlighted how accountants can play a role in transforming businesses to better operate in a resource constrained economy, as well as better communicate with their stakeholders.

Accountants have the knowledge, understanding, and better appreciation of the connection between financial performance, risk management, and sustainability. Those in leadership positions such as CFOs can provide the critical link between management and stakeholders. CFOs have the longer term vision on the importance of <IR> and can serve as enablers, to push the boundaries of reporting and constantly think about the future and beyond the numbers.

Accountants can bridge the gap and establish connection between all parts of the business and interpret the numbers meaningfully. Their rigour in assessing financial information could spill over into the non-financial aspects of the business.

How to make it work?

Pauline Ho, a member of the MIA Integrated Reporting Steering Committee and Assurance Partner for PwC Malaysia shared five key areas that businesses need to focus on in adopting <IR>: materiality assessment, risk disclosure, consistency and comparability (of financial and non-financial performance indicators), internal and external factors impacting the business, and the value creation business model.

“Encouragement to start is very important. Start small and take the journey over time,” said Pauline. She added that professional accountancy bodies can encourage businesses to take the first step and learn from the experience of others.

In their closing remarks, the panellists shared the following takeaways:

  1. Nobody knows your business like you do. Use <IR> as a tool to share your passion about your company.
  2. <IR> adoption does not happen overnight, as it is a journey. Start now, take your time, embrace change and the challenges that come with it, get help from those who know, and learn from your journey.
  3. Make use of the many resources available. In addition to the framework, the IIRC provides guidance, practice examples, and other supporting resources that businesses can use to learn more about and start with their <IR> journey ( Other resources are also available from MIA ( and CPA Australia (

Regional collaboration

For AFA, the Malaysian institute of Accountants (MIA), and CPA Australia, the webinar was their second collaboration in the space of 12 months, after a successful joint webinar on Improving Public Sector Governance through Financial Reporting in November 2020.

“AFA aspires to lead in and contribute to our collective efforts in enhancing the capacity of our ASEAN accountancy profession. Today’s webinar is another example of our excellent collaboration with Professional Accountancy Organisations (PAOs) in the ASEAN region, to provide ASEAN accountants with an opportunity to hear first-hand from our regional and international experts. Despite the difficult circumstances, technology has been a key enabler for AFA and our member organisations in our efforts to transition most of our activities to online platforms,” said Aucky Pratama, Executive Director of AFA, reflecting on the Federation’s productive 2020.

#afaaccountants #aseanaccountants

Aucky Pratama is the Executive Director of the ASEAN Federation of Accountants (AFA). This article was first published in May 2021 on

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