Page 506 - SBR Integrated Workbook STUDENT S18-J19

Chapter 25

Example 6 – continued

Drawbacks

Confidentiality

Lario operates in a technologically innovative industry and so its research and
development activities are confidential. Providing extra disclosures in an
integrated report could lead to a significant loss of competitive advantage.
Balancing Lario’s concern about confidentiality against the need for disclosure
may prove difficult and result in an integrated report that offers little insight to
its users.

Investment

Lario may need to invest heavily in new systems in order to collect information
and data necessary for the integrated report.

Time

It could be argued that producing an integrated report diverts management
time from revenue generating activities.

Clutter

Some financial statement users may view integrated reports as another form
of ‘clutter’ and feel overwhelmed by the quantity of information that they are
presented with.

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