INTEGRATED NARRATIVE DISCLOSURE Essay Example | Topics and Well Written Essays - 1000 words

INTEGRATED NARRATIVE DISCLOSURE - Essay ExampleThis inescapably gives rise to a better understanding to investors and improves relationships between stakeholders. In addition, the underlying procedure needed to breed this information can also improve governance and enhance board effectiveness. A more all important(p) reason why firms embrace narrative reporting is that it is not a burden, rather an opportunity, which when used fittingly can act as a basis for developing real competitive advantage. According to Brennan, hurl & Encarna, (2000), narrative disclosure is essential in effective communication in organizational audience, inclusive of stakeholders, shareholders, and the intact society. For instance, corporate narrative records are used to give an account of managerial decisions and actions, to notify shareholders on strategies, to represent organizational reputation and identity, to influence organizational audiences concerning the legality of a firm, to persuade share holders on the benefits of a putsch or merger. According to the Financial Reporting Council, (FRC), the about vital disclosures for shareholders are sporting out the most critical risks and how to manage them an explanation of the monetary position and financial results a blueprint of future prospects and plans and a description of the business model. Narrative reporting plays all the right notes, though it plays all of them at the kindred time. From the time of the financial crisis, as anticipations read been determined by yearly reports as descriptors of models in business, opinions have come up about its potential drop to communicate business models. Growing regulatory complexity, uncertainty as to what audience narrative reports serve and extreme detail have all merged to create a culture that produces a deafening dissonance of noise on any individual attempting to read an yearbook report. Data overload is adversely hampering the significance of narrative reporting, a case that is quite frankly, rather annoying. The seem part of a yearly report any financial statement that is not audited has an essential theatrical role to play in annual reports. Dissimilar from the numbers, narrative reports gives a participation the opportunity to present its score in a unique way by providing a sense of a firm in a manner that cannot be achieved when using a balance sheet. Prose can disclose a companys operating environment, strategic direction, its values, and governance structure (Sydserff & Weetman (1999), While it is not a guarantee for a narrative report to be used by the senior most investors who may probably interrogate a company, this report is extremely precious to the entire host of other stakeholders, regardless of whether they are potential shareholders, potential customers, or employees. Within this report, there should be any(prenominal) data that will have an equal on investment decisions. However, whilst narrative reports are viewed as a shar eholder tool, it is the regulators needs that seem to be taking priority in their cookery. The critical challenge or problem in report preparation is the number of necessities placed on preparers, as well as the time and cost involved in developing the report. A lot of effort and time can be spent working on report sections to achieve regulatory needs that are of little significance to any person, either by giving too many details or offering nothing but neutral, regulatory-approved company-talk. The nature of some