Unified Integrated Reporting: The Key to Fair Economy in a Multipolar World

1.     Overview of the current financial-economic context, reflecting the transition to a multipolar world and the necessity for transformations in the reporting system.

Globalization significantly redefines the economic map. The end of unipolarity, decades of Western dominance, are being replaced by multipolarity. This is most noticeable in the growth of the economies of China, India, Brazil, their influence on the global economy is intensifying.

Multipolarity generates challenges for the international financial system, including the need to transform financial reporting. This reporting is a critically important element of the economy, providing information exchange between stakeholders: companies, investors, regulators, the public.

However, reporting standards developed in a unipolar world may be infeasible in multipolar realities. Lack of unification, standardization, contradictions and diversity of approaches between standards, complexity of interpretation and data analysis create serious problems.

Transformational analysis of the reporting system is needed, identifying possible directions for its change. The aim is to create a system that reflects the realities of the multipolar world and serves the interests of all stakeholders.

2.     Issues: Diversity of reporting standards and data complexity

Fragmentation and plurality of standards are the key problems of the modern reporting system. International, national, industry, corporate standards - each with unique requirements and features.

Consider the International Financial Reporting Standards (IFRS) and US GAAP (Generally Accepted Accounting Principles) - two well-known sets of international standards. IFRS is developed by the International Accounting Standards Board (IASB), US GAAP is controlled by the Financial Accounting Standards Board (FASB) in the US.

Both sets of standards are designed to present a true and complete picture of the financial position of organizations, but they differ in definitions, calculation methods, and disclosure requirements. As a result, companies complying with different standards can present significantly differing financial information, despite the similarity of their economic position and operations. This complicates the comparison and analysis of data, especially for international investors and analysts.

Similar problems arise when comparing reporting prepared according to national standards of different countries, or even reporting of different companies within one country or industry, using different corporate standards.

There needs to be a review of reporting approaches and finding ways to create a more universal, fair system that takes into account the interests of all participants in the economic process.

3.     Marxism-Leninism and social justice: a basis for discussing fairness in the reporting system

Social justice is a key concept of Marxism-Leninism, based on the critique of the capitalist system and inequality in the distribution of wealth and power.

According to these ideas, the means of production belong to society, and the income from their use is fairly distributed among all members of society. The Marxist-Leninist concept of social justice implies that no one should benefit from the exploitation of others and that everyone has equal access to public goods.

In his works, Lenin said that socialism, above all, is control and accounting. Thus, even at the dawn of the change of capitalist principles of profit distribution, a huge role was given to reporting systems and the system of planned management created with their participation. We see that the ideology of society is closely related to reporting issues. A transparent, reliable system of reporting on the financial position of organizations and their use of resources is an essential tool for achieving social justice. It controls the actions of corporations, prevents abuses, and ensures the fair distribution of income.

4.     Analysis of CCP practices: reflecting ideas of social justice

The Chinese Communist Party (CCP) adheres to Marxist-Leninist ideas, however, it adapts them to specific conditions, updating its ideology in response to modern challenges. The CCP focuses on issues of social justice and equality.

The key task of the CCP is to ensure the fair distribution of wealth. This is achieved through state regulation and planning, as well as a social security system supporting the most vulnerable layers of the population.

In corporate reporting, principles of transparency and accountability lead to a deep understanding of an organization's activities from its inception. Chinese companies provide detailed information about their financial position and activities, helping to control their actions and ensure compliance with laws and standards to achieve social justice.

The CCP recognizes that the ideal reporting system should take into account the characteristics of a specific society and economy. In China, there is an active search for new approaches to reporting to enhance its effectiveness and facilitate the achievement of social justice goals.

5.     Analyzing approaches to reporting its financial and non-financial components: ESG, NAEN, URMS, and modified IFRS. Pros and cons of each considering fairness.

• ESG Reporting: Advantages: Global recognition of ESG. It is used in the assessment of an organization's social responsibility, relationship with the environment, and quality of management. It helps attract investments, as investors focus on these aspects when making decisions. Disadvantages: There is no universal ESG reporting standard, which complicates the comparison and performance assessment of organizations, it is controlled by an ideologically colored community with widespread use of "Green PR" and manipulation with environmental damage and social risks.

• NAEN Code: Advantages: A national standard adapted to the specifics of the Russian natural resources sector. Based on the international standard CRIRSCO, compatible with international standards. Accounting for all factors influencing the assessment of reserves and resources of solid minerals. Disadvantages: NAEN specificity - adapted only for the industry of solid minerals. May cause difficulties in the global context, when it is necessary to compare with organizations using other international standards.

• URMS: Advantages: National hydrocarbon management system based on PRMS standard. Compatible with international standards, allows accounting for various aspects of hydrocarbon extraction. Disadvantages: The hydrocarbon management system, although it provides accounting for various aspects of hydrocarbon extraction, is inapplicable in other industries.

• Modified IFRS: Advantages: IFRS are international standards that ensure transparency and comparability of financial reporting. IFRS modifications allow accounting for the specifics of various sectors and geographical markets, including the natural resources sector. Disadvantages: IFRS may be difficult to apply, especially for organizations without sufficient experience or knowledge in this area. In addition, IFRS modifications can increase the complexity of standards and cause additional difficulties in their application and audit. In the non-financial part, dealing with sustainable development and risk forecasting- is ideologically colored by other standards (ESG influence is especially noticeable).

6. Principles of creating a universal reporting system that combines the strengths of existing approaches

✓ Transparency. Accessible, understandable information is needed, encompassing all important aspects of activity, not limited to financial indicators.

✓ Meeting stakeholders' interests. Reporting should reflect the interests of all participants - from shareholders to society and the environment.

✓ Sustainability. It's important to account not only for current results but also for long-term strategy, risks including environmental and social ones.

✓ Flexibility. The system should be ready for quick adaptation to changes in the external environment and the organization's strategy.

✓ Completeness. Accounting for all aspects of activity: financial, social, and environmental indicators for a comprehensive picture.

✓ Social fairness. The system should take into account the interests of all layers of society, vulnerable groups, and ensure equal distribution of income and benefits.

Adherence to these principles will allow creating a reporting system that meets the interests of all stakeholders and contributes to sustainable development.

7. Examples of implementing principles of creating a universal reporting system:

Transparency. Use of interactive platforms, websites for demonstrating information about activity, financial condition, strategy, risks. Infographics, simple explanations of complex topics. Regular updating of information, open dialogue with stakeholders.

Meeting stakeholders' interests. Regular surveys among stakeholders to determine their interests, expectations. Reflection in reporting corresponding to interest indicators - sustainable development, jobs, social impact.

Sustainability. Inclusion in the reports information about the strategy of sustainable development, carbon accounting, social responsibility. Use of scenario modeling to demonstrate the impact of various risks on long-term sustainability.

Flexibility. Revision and updating of the reporting system when market conditions, technologies change, reflecting new challenges and opportunities.

Completeness. Accounting for financial, non-financial indicators - social impact, personnel costs, customer satisfaction level, contribution to society.

Social fairness. Representation of measures taken to ensure equality, rights protection, equal distribution of income and opportunities.

Such implementation of principles will allow creating a comprehensive reporting system, meeting stakeholders' needs and contributing to sustainable development.

8. Analysis of the benefits of planned economy for the new reporting system

Planned economy - a system where production, distribution, consumption of goods and services are centrally controlled. Unlike a market economy, decisions are made centrally, not based on supply and demand.

Advantages of a planned economy:

• Effective resource management - accounting for public needs, equal access to resources.
• Stability and fairness - reducing social and economic differences.
• Predictability - planning processes and results in advance.

However, there are also disadvantages: lack of competition, innovation, possibility of bureaucratic delays, corruption. These problems are important to consider when integrating aspects of a planned economy into the reporting system.

The potential for integrating a planned economy into the reporting system:

• Long-term planning - reflecting in reporting.
• Indicators of resource distribution, wealth - demonstrating the company's contribution to a fair society.
• Involving stakeholders in the planning process and decision making - greater transparency, openness.

9. Socialist approach to enterprise management: principles and significance for equitable distribution of capital

The socialist approach to enterprise management covers principles of equality, fairness, common good. The company's priorities and actions are aimed at meeting the needs of workers, community, society, not just maximizing profit for shareholders.

Key principles of the socialist approach:

• Democratic management - active participation of workers in decision-making, creating a workplace that respects workers' rights and interests, improving productivity and worker satisfaction.
• Social justice - equal distribution of wealth and rewards, fair distribution of income among workers.
• Public good and sustainable development - accounting for the impact of the company's actions on society and the environment, striving for positive contribution.

The integration of these principles into the reporting system can contribute to the fair distribution of capital. Transparency and accountability for the actions and decisions of the company are ensured. In addition to financial results, reporting can include social and environmental issues, presenting a broader perspective.

10. Conclusion: Unified Integrated Reporting for Fairness and Transparency

Financial and economic reporting and fairness

Today's world of financial reporting faces problems of discrepancies in systems and lack of fairness. In the context of social justice, based on Marxism-Leninism, and its reflection in the modern practices of the CPC, an analysis of existing approaches to reporting (ESG, NAEN code, SUUR, modified IFRS) shows the advantages and disadvantages of each of them.

Proposed solution

The proposal to create a unified universal reporting system implies the integration of the best aspects of existing approaches, applying the principles of fairness, transparency, consideration of all stakeholders. By combining the main indicators of market and planned approaches to reporting, such a system provides a deep and comprehensive analysis of the company's activities.

Contribution of the planned economy and the socialist approach

An important component of this approach is the integration of the strong sides of the planned economy and the principles of the socialist approach to enterprise management, which contribute to the fair distribution of capital and increase social justice.

Vision of the future: Integrated reporting

In the future, unified integrated reporting will become the norm. All organizations, regardless of their size or industry, will follow the same principles and standards, ensuring equal conditions for all and eliminating the possibility of manipulating reports.

Transparency and accountability will become the key pillars of business. Organizations will take into account their impact on society and the environment, not just striving for profit maximization.

Adaptive and global reporting system

The unified integrated reporting system will provide not only global standards but also adapt to the specifics of individual markets and industries, taking into account cultural, economic, and social differences. It will include mechanisms to prevent and detect fraud, thereby increasing public confidence in the financial and economic system and strengthening faith in the possibility of a fair market.

Ultimate goal

With this system, we can create a world where the economy operates in the interests of all, not just the few. This is a world where fairness, transparency, and sustainability become the foundation for a successful and prosperous society.