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The importance of integrated thinking for finance professionals

Four hands, putting a jigsaw together

Why do I need integrated thinking?

If the role you do – or the role you’re aiming for – involves corporate reporting, you need to understand integrated thinking.

In today’s volatile business landscape, there’s much more to appraising organisations than simply looking at their year-end numbers. Research shows 90% of an organisation’s value is in intangible assets such as reputation, human capital, and intellectual property. That’s 90% largely not recognised by traditional accounting standards.

There’s a growing demand in all sectors to combine this non-financial information with standard financial data to create meaningful reports and support better decision making.

It’s about providing shareholders and other stakeholders with the full picture. And that’s where integrated thinking comes in.

How does integrated thinking link to integrated reporting?

Integrated reporting, or “IR” as it’s known, offers a powerful lens through which to assess your organisation and its activities. To adopt an IR approach, you need to embrace integrated thinking.

In a nutshell, integrated thinking is about considering how your organisation affects, and is affected by, economic, environmental and social values.

For instance, how do activities in different parts of the business combine to create value? What compromises is the business making in the short term to maximise long-term rewards? How is the business limiting any detrimental impacts from these measures – between the environment and profit, for example?

As an accountancy or finance professional, understanding how to harness the power of integrated thinking and use it to communicate a broader set of findings in your annual integrated report is an essential skill to have in your toolkit.

Is integrated reporting covered by the ACCA and CIMA?

Both the ACCA and CIMA have recognised the value to professionals of developing integrated reporting skills. You’ll find this career-enhancing subject in the Advanced Performance Management (APM) option for the ACCA Strategic Professional qualification, and in the course content of CIMA Management, the second level of the CIMA Professional qualification.

And the good news is, this important area of study is nothing to fear.

“The inclusion of integrated reporting in the ACCA APM syllabus should not cause major difficulties for students,” says the ACCA. “In many ways, it is corporate reporting catching up with the aspects of analysis and reporting which Management Accountants have already been performing for internal, organisational use.”

Will integrated thinking skills be valued by future employers?

In its report, Invisible Threads: Communicating Integrated Thinking, the ACCA answers that with a resounding yes. “Well-embedded integrated thinking can make organisations more resilient in the face of challenges, like those that arose from the Covid-19 pandemic,” it says.

CIMA is in agreement. “Integrated reporting has rapidly gained prominence as one of the main management and accounting innovations of the recent decade,” CIMA says in its own report, Integrated Thinking. “And this trend is due to continue.”

At Kaplan, we can help you keep pace with the trend.

Next steps

See how you can learn more about integrated thinking and reporting with our ACCA and CIMA courses.