Deck 19: Sustainability Management Accounting

Question 1

Research has shown that if an organisation pursues sustainability, in the long-run this will lead to a drop in its profitability.

Answer 1

B

Question 2

An organisation can reduce its carbon footprint by outsourcing some of its operations.

Answer 2

B

Question 3

Employees will always make ethical decisions if they act in the best interests of their shareholders.

Answer 3

B

Question 4

Sustainability management accounting is essentially a one-way process that generates information about how the pursuit of sustainability impacts on the organisation.

Question 5

Progress on sustainability is most likely to be achieved by:

A) individual champions
B) employees
C) multidisciplinary teams
D) management accountants

Question 6

An issue for management accounting is how to integrate specific environmental or social management systems for financial regulation with the general management system of the entity.

Question 7

Under activity based costing, as it is currently practiced, sustainability costs are generally grouped into the one cost pool.

Question 8

A key goal relating to sustainability and sustainable development is to:

A) achieve social justice
B) foster economic and social progress
C) live within our environmental resource limits
D) all of the above are key goals

Question 9

Ethical behaviour is required of every employee within an organisation.

Question 10

For a sustainability culture and related practices to develop within an organisation sustainability management strategies should be aligned with sustainability management accounting systems.

Question 11

Ethical behaviour is an individual obligation, not an organisational obligation.

Question 12

Carbon accounting can be interpreted as a vehicle for internalising previously ignored externalities.

Question 13

Indexes like the Global Reporting Index are not important for management accountants but are only used by financial accountants for external financial reporting.

Question 14

Currently many organisations are well on their way to being sustainable.

Question 15

Life cycle analysis ends with the sale of the product.

Question 16

The balanced scorecard is seen more as a strategy communication tool rather than a tool useful for sustainability performance evaluation.

Question 17

The three sustainability management goals of economic, environmental, and social sustainability are generally in harmony.

Question 18

The process of implementing sustainability is:

A) requires new thinking
B) can be copied from another organisation
C) generally well understood
D) is similar for most industries

Question 19

Currently, in many organizations, sustainability costs tend not to be treated as separate costs within the accounting system.

Question 20

There is a view amongst certain ethical investors that the voluntary nature of sustainability disclosure can increase reporting bias.

Question 21

Which of these environmental costs is the easiest to measure?

A) Societal costs
B) Contingent costs such as lawsuits relating to environmental failures
C) Upfront costs such as initial design costs
D) Image costs which may affect brand names and goodwill

Question 22

Which of these types of costs is not a private cost to an entity?

A) contingent costs
B) hidden costs
C) conventional costs
D) societal costs

Question 23

When is the most appropriate time to identify ethical problems in organisations?

A) As they arise
B) After they arise
C) When they are discovered by legal authorities
D) When they are discovered by shareholders

Question 24

A principle of sustainable operations is 'what goes in must come out'. The input that doesn't match its output is:

A) Oranges in a juice factory - orange peel that is turned into stock feed
B) Packaging - recyclable waste
C) External produced electricity from coal fired power stations - municipal waste
D) Gold production - arsenic and heavy metals

Question 25

The process of measuring, monitoring and simultaneously controlling the economic, environmental and social dimensions of an entity is known as:

A) sustainability management
B) sustainability accounting
C) sustainability
D) none of the above

Question 26

The most effective way for an entity to take into account the external environmental and the sustainability costs of its activities is:

A) to follow guidelines provided by external parties
B) by voluntary disclosure
C) for the government to issue fines and penalties for breaches
D) for the entity to internalise the external costs

Question 27

These steps in ethical decision making occur in which order?
1 Objectively considering the well-being of others and society
2 Working towards ongoing improvement of personal and organisational ethics
3 Clarifying and applying ethical values when choosing a course of action
4 Identifying ethical problems as they arise

A) 4, 1, 3, 2
B) 1, 2, 3, 4
C) 4, 3, 2, 1
D) 2, 3, 1, 4

Question 28

The environmental or sustainable accounting package includes:

A) auditing and assurance services
B) management accounting techniques
C) financial accounting
D) all of the above

Question 29

A management accounting tool that can be used to achieve sustainability is:

A) capital budgeting
B) life cycle analysis
C) value chain analysis
D) all are management accounting tools that can be used to achieve sustainability

Question 30

Costs that an entity imposes upon others as a result of its operations but which the entity typically ignores, are called:

A) contingent costs
B) externalities
C) societal costs
D) a and c

Question 31

Which of these will tend not to support performance and sustainability business governance?

A) tailoring information on sustainability to the industry and organisation
B) having a CEO who is dominant over the board
C) aligning the key drivers of sustainability with information reported externally
D) balancing the need for investor's returns with the wider needs of society

Question 32

Risk that emerges in the form of a breakdown in internal processes is known as:

A) operational risk
B) reputation risk
C) competitive risk
D) asset impairment risk

Question 33

The incorrect statement concerning incorporating sustainability into an organisation is:

A) There is general agreement world-wide on what is meant by sustainability
B) It requires a long-term focus
C) It requires a change in corporate culture
D) Participation of multiple stakeholders along the value chain is a key factor for success

Question 34

Rewards for ethical behaviour can include
I Integrity
II Reputation
III Higher profits

A) I and III only
B) I and II only
C) I, II, and III
D) II only

Question 35

The index for ranking companies on their sustainability practices is:

A) The Australian SAM Sustainability Index (AuSSI)
B) The Global 100 Most Sustainable Corporations in the World
C) The Dow Jones Sustainability Index (DJSI)
D) All are sustainability benchmarking indexes

Question 36

Research has found that ethical considerations are reported by what percentage of respondents as a reason for increasing their corporate social reporting?

A) 36%
B) 53%
C) 21%
D) 62%

Question 37

The fundamental reason for making an organisation sustainable is:

A) to pre-empt government legislation
B) to ensure that the organisation grows
C) to meet the needs of the present without compromising the ability of future generations to meet their own needs
D) all of the above

Question 38

The set of guideline it is compulsory for all Australian companies to follow when reporting on sustainability is the:

A) Balanced Scorecard
B) Global Reporting Initiative (GRI)
C) ASX Corporate Governance Principles and Recommendations
D) There is not a set of guidelines that it is compulsory to follow

Question 39

The statement concerning the ASX Corporate governance principles and recommendations that is not correct is:

A) If a listed company does not follow the principles it must explain why in its annual report
B) It requires companies to prepare separate annual reports on their sustainability
C) Its focus is on the society and the environment as risk management concerns
D) It contains eight principles

Question 40

Which of these is not a core indicator of the Global Reporting Initiative's sustainability reporting framework?

A) information on employee turnover
B) information on childcare places provided
C) information on product labelling
D) information on occupational health and safety

Question 41

The issue that cannot be related to sustainability is:

A) packaging
B) bribery and kickbacks
C) customer privacy
D) none of the above, i.e. all can be related to sustainability

Question 42

Which of these is a behavioural issue as opposed to a technical issue when implementing sustainability change processes within an organisation?

A) Identifying suitable social and environmental measures for performance evaluation
B) Creating ownership of projects by participants
C) Arriving at suitable objectives in line with sustainability strategies
D) All are behavioural issues

Question 43

The way that the balanced scorecard should be adapted as a tool for monitoring sustainability which is generally considered to be the most useful approach, is:

A) Adding an additional sustainability perspective
B) Developing a separate, individually derived, sustainability scorecard in conjunction with the existing scorecard
C) Integrating environmental and social aspects into the four standard perspectives
D) There is no opinion as to which is the best option

Question 44

In calculating a carbon footprint for an entity which of these is an indirect as opposed to a direct emission?

A) Onsite waste
B) Emissions generated from purchased electricity
C) Fuel usage for transporting inputs
D) All of the above are indirect emissions

Question 45

To best highlight sustainable costs and benefits sustainability costs should be:

A) allocated to there own cost pools
B) treated as period costs
C) traced directly to cost objects
D) a and c