Applying Dominant Theoretical Perspectives in Accounting Research
As per the materiality matrix of Telenet’s annual report, with regard to communicate with the shareholders, they drew up a materiality matrix. The matrix was planned as per the four-step plan that assisted them to identify the most crucial issues for the sustainable management. they started from the point of analysis of the performance as per the Global e-Sustainability Initiatives that pointed out the weaknesses associated with the development of the business of the organization (Bebbington, Unerman and O’Dwyer 2014). The given case study critically analyzed the disclosures with regard to the sustainability of the organization and focused on the integrating reporting. It is identified through the case study that the role of the shareholders are crucial with regard to the materiality matrix for the determination of disclosures related to the sustainability issues. Moreover, it is identified that the report to be completed from all aspects must be complete which in turn requires the company to make the proper disclosures related to all the material facts. Therefore, it is required to identify the extent to which the information that is disclosed is relevant for the decision making by the shareholders (Ioannou and Serafeim 2016).
The shareholders are expected to be considerably affected by the company’s activities, products and services. Further, the activities of the shareholders affect the organization’s ability to implement its strategies for achieving the objectives (Hahn and Kühnen 2013). The information that can be included in the report of the company for providing the shareholders with detail information to enable them to make their decisions are –
Shareholders engagement policy: the shareholders engagement procedure serves as an important tool for getting the clear idea regarding the interests and reasonable expectations of the shareholders. All the organizations initiate various kinds of shareholders engagement as part of the regular activities of the business that can deliver useful information for taking various decisions on the reporting. This information involves the stakeholder’s engagement for the compliance with the required standards or communicating the ongoing business or organizational procedures. Apart from this, the engagement of the shareholders may also be developed especially to communicate the procedure of report preparation. The companies may also utilise various other means like collaborative activities, scientific community and media with the peers and the shareholders. These objectives assist the organization in better understanding of the interests and the reasonable expectations (Flower 2015).
Business model: the model that the company are using for the business is an important inclusion that will help the shareholder to make their investment related decisions. For instance, the range of products offered by the company and the price range of the product must be included in the report, so that the shareholders can assess the future profits of the company. If there is no specific model or strategy, then the shareholders will have to assess the ability of the company to overcome the economic booms or recession. However, the business model of some companies is very complex and not easy to understand. In such case, the the unbiased and sound financial newsletter can help to get deep insight regarding how the company is earning profits and rewarding its shareholders.
Prescribing and Predicting Market Reactions
Competitive advantages: the competitive advantage is the advantages over the other companies through the patents, superior products, operating efficiencies, technologies and brand power. The company must mention in their report about its competitive advantages to assist the shareholders to make their investment related decisions. The company which has strong recognition for brand name and deals with the popular item which is hard for the competitors for making the substitutes will definitely attract the shareholders to invest with the company. The competitive advantages will also assist the investors in making a comparative analysis with other competitors of the company before taking the final decisions about their investment.
Ratio analysis: The ratio analysis will provide the investors with crucial information like profitability ratio, solvency ratio, liquidity ratio and market performance ratio. Further, the ratios shall be compared with the industry average, so that the investors will be able to analyse the growth opportunities of the company and the performance of the company can be compared with the industry standards. Further, the ratios enable the investors to assess the ability of the company regarding their liquidity position and whether the company is able to pay-off their obligations with the available assets (Cheng et al. 2014).
The main objective of the integrated report is to explain financial capital regarding how the organizations create value over a particular period of time. The integrated report assists the shareholders to generate value for the firm that includes the local communities, legislations, policy-makers, legislators and the employees. The integrated reports are prepared on the basis of the international framework. It is prepared with the intention of establishing a balance between the prescription and the flexibility that recognize the wide difference in the environment of the various organizations. Looking into the integrated report of Telenet it is found that the integrated report of Telenet has some issues as it has failed to align with the international framework for the preparation of their integrated report. The issues are listed below:
- The value creation potentiality of any company is depended upon the ability of identifying the resources that are available to them, irrespective of intangible or tangible that are owned by the third parties or the organization itself and aligning them with the corporate strategies of the company.
- If any value is created by the company that includes the benefits to the society as whole, that has significant impact on the profitability and the value of the business. Therefore, it must have been included in the integrated report.
- An organization which communicates the strategy related to its operation to the industry and quantifies their contribution may regarded as stimulating the creation of value itself. However, for improving the confidence of the shareholders the information are required to be relevant.
- Over the decades, the integrated reports are prepared to fulfil the requirements of the shareholders. However, while preparing the financial statements, other users like creditors, customers shall also be taken into consideration
- The link between the risk, business strategy and current reporting were not found in the annual report of the company.
- The information related to non-financial report was not sufficiently credible and the information should have been integrated in the broad aspect with the financial data.
- The statements for the qualitative policies are crucial to analyse the financial materiality, however the quantitative for the indicators of key performance were just being stated in light manner.
- The accountability system must have been shown as a part of the non-financial statements, either using the method of new oversight for the board or through the shareholders approval or through the assurance from the third-party at the AGM.
- The annual reports are presented in complex manner that requires high level of technical experience and knowledge regarding the international standards (Adams 2015).
- It is found that there is lack of regulatory and conceptual framework in the non-financial report of the company, which in turn, lead to the inconsistency in the report. It may cause the shareholders to find it tough for comparing the various benchmarks.
- The report must have included the strategies of the company regarding the allocation of the resources and how the company is aimed to achieve their target and maintain the sustainable growth opportunities
- It must have been included in the report regarding the uncertainties and challenges that the company are susceptible to in implementing their strategies and achieving the target and its effect on the outcomes and future performance of the company.
Apart from the above mentioned points, the company must have included in the report about their value-adding activities. The major elements regarding the strategies of the organization and the relevant initiatives that are designed to generate the value like planning, innovation, production, design, relationship, service level agreements and the differentiation factors must have been included in the report. Further, the capitals could have been segregated into intangible and tangibles. The company hold the tangible as well as intangible assets for the purpose of production or supplying the services or goods in the business procedures. Moreover, the capitals not only interact within the organization but are also influenced by the external factors. These factors include the technological development, economic environment, climatic issues and social changes. The company’s ability to remove these risks and adapt the changes with the circumstances is the key issues. Therefore, it must have been included in the report to provide the shareholders with clear concept of regarding the risk mitigation approaches of the company. Therefore, to prepare the annual report as well as the integrated report as per the international framework and standards, the company should focus on all the above mentioned issues (Abeysekera 2013).
Using Various Theoretical Perspectives
The annual reports of Telenet included the report regarding their sustainability strategies and the implementation of sustainable strategies during the recent years. Under this section, they included that the Green together programme of the company includes the total series of methods to minimize the impact of environment generated through their operations. The above mentioned programme influences the savings of material and energy. It also encouraged the company to implement smart services that will help the people in that area to lead their life more ecologically and thereby saving of more cost (Vella 2015). The report further mentioned that the main objective of the Linking Environment And profit (LEAP) programme is to align the sustainable strategies within the company. Though the sustainability report included in the annual report of Telenet is not enough to provide a clear view of its purposes as the report is too small, the purposes for the inclusion of sustainability report may be as follows:
- Financial performance – it has been analysed by the supporters for the reporting that it has a great impact on the intangible benefits of the company and other benefits like loyalty from consumers and the consumer reputation if the company provides appropriate disclosures regarding their sustainability (Lock and Seele 2016)
- Capital access – as per the research it is established that the reporting opens new doors for less costly capital sources. Through the reporting on the sustainability initiatives, the organization becomes able to influence the possible source of finance that they involve less risks and are competitive. It is identified that the investors prefer to invest in that organization that are providing transparent reports regarding their sustainability approaches.
- Communicating the efforts related to the sustainability indicates that the firms are able to provide firm quality and that assists in lowering the firm’s equity cost. Moreover, the competitive industries are tend to contribute towards mire environmental and social programs and are tend to implement large numbers of initiatives regarding sustainability. Telenet may view their sustainability effort as the opportunity to differentiate themselves from their competitors positively (Taticchi 2013).
- Efficiency and waste reduction – collecting information and preparing a report assists the company to find out new methods for collection of data and implement them in innovative way for long-time sustainability. It also assists in reducing the wastes, implement innovative procedures and gain in-depth knowledge of the growth areas.
- Risk management – the reporting assists the company in managing their risks in better way and opening new dimensions for the business. Reporting on the sustainability allows the firm to prepare and anticipate the issues associated with the community operation, increase the alertness in the improvement procedure and prepare and anticipate for the scarcity of material in the future (Milne and Gray 2013).
- Social benefits – the organization that prepare the sustainability report have identified that doing good and doing well are not mutually exclusive. Through the report, they communicate with the shareholders outside the organization and integrate with global and local communities in better way.
According to the relevant report, it is seen that the users of corporate reporting will have an optimistic reaction towards the integrated reports that have been prepared by Telenet. The integrated report of Telenet helps in the operations of the business to have a think in a peaceful manner regarding the plans and the strategies that have been constructed in order to construct an efficient plan that will enhance the functions of the business and will even satisfy the users of corporate governance.
The process of integrated reporting involves the use of a new and innovative framework that combines and makes use of the financial and the no-financial data. It is helpful for the organizations to restore the parity and the increase the c9onfidence of the internal and the external stakeholders by publishing the transparent and better information among the hospitals. It is even seen that method of corporate reporting aids the development of the business and is helpful for the users to identify the various problems that have been concentrated on and thereby help Telenet to reduce the movement of the firm and understanding the report by the individuals and how the organizations are helpful for the development of rhea country and the financial performance that is relevant to the governmental and the environmental issues.
It is even seen that the users of corporate reporting have great influence on the integrated reporting and with the help of this report; and all the valid documents that are revealed by the report have no similarity. The integrated reports that have been constructed by the users will be useful for the users of corporate reporting as well as the integrated report. It is known that the environmental changes and the sustainability reports that have been framed reveals a concern towards the environment and thereby recommend there for a better idea and use of this information. The integrate report shows the annual report of Telenet and discovers all the key issues that are taken into consideration within the report with respect to the integrated job and the idea about the market. The introduction of integrating report however, the introduction of the sustainability and the environment will help in the introduction of a new plan that will reduce the healthcare sector of the firm.
The reaction of the market and to answer the media press; regarding the off- form that the company has been facing for a specific and thereby the water can be used for drinking and other factors. The use of accounting and non-accounting information will have an impact on the capital market with regards to the market..
The thought about the sustainability and environment will be helpful for the creation form of making an alliance. Almost all the people have knowledge about the functioning of this reporting and hiding the facts that may not be usable after certain conditions. Thus it can be said the that the users of corporate reporting is helpful for the development of the experts who are labouring day and night for the consumers.
Reference and Bibliography
Abeysekera, I., 2013. A template for integrated reporting. Journal of Intellectual Capital, 14(2), pp.227-245.
Adams, C.A., 2015. The international integrated reporting council: a call to action. Critical Perspectives on Accounting, 27, pp.23-28.
Bebbington, J., Unerman, J. and O’Dwyer, B., 2014. Sustainability accounting and accountability. Routledge.
Bouten, L. and Hoozée, S., 2015. Challenges in sustainability and integrated reporting. Issues in Accounting Education Teaching Notes, 30(4), pp.83-93.
Cheng, M., Green, W., Conradie, P., Konishi, N. and Romi, A., 2014. The international integrated reporting framework: key issues and future research opportunities. Journal of International Financial Management & Accounting, 25(1), pp.90-119.
Flower, J., 2015. The international integrated reporting council: a story of failure. Critical Perspectives on Accounting, 27, pp.1-17.
Hahn, R. and Kühnen, M., 2013. Determinants of sustainability reporting: a review of results, trends, theory, and opportunities in an expanding field of research. Journal of Cleaner Production, 59, pp.5-21.
Ioannou, I. and Serafeim, G., 2016. The consequences of mandatory corporate sustainability reporting: evidence from four countries.
Ioannou, I. and Serafeim, G., 2016. The consequences of mandatory corporate sustainability reporting: evidence from four countries.
Juš?ius, V. and Snieška, V., 2015. Influence of corporate social responsibility on competitive abilities of corporations. Engineering Economics, 58(3).
Juš?ius, V. and Snieška, V., 2015. Influence of corporate social responsibility on competitive abilities of corporations. Engineering Economics, 58(3).
Lock, I. and Seele, P., 2016. The credibility of CSR (corporate social responsibility) reports in Europe. Evidence from a quantitative content analysis in 11 countries. Journal of Cleaner Production, 122, pp.186-200.
Milne, M.J. and Gray, R., 2013. W (h) ither ecology? The triple bottom line, the global reporting initiative, and corporate sustainability reporting. Journal of business ethics, 118(1), pp.13-29.
Taticchi, P., 2013. Sustainability Measurement and Reporting: Impacts on Finance, Stakeholders Communication and Internal Measurement Practices. In Corporate Sustainability (pp. 221-231). Springer Berlin Heidelberg.
Telenet.be. 2017. telenet.be. Retrieved 5 May 2017, from https://www2.telenet.be/nl/
VELLA, C.J., 2015. Integrated Visual and Auditory CPT.
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