Deck 20: Sustainability Management Accounting

Question 1

The fundamental reason for making an organisation sustainable is:

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

Answer 1

A

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

Ethical behavior is required of every employee within an organisation.

Question 10

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

Question 11

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

Question 12

Life cycle analysis ends with the sale of the product.

Question 13

Progress on sustainability is most likely to be achieved by:

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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 18

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

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

Question 19

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

Question 20

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

Question 21

The index for ranking companies on their sustainability practices is:

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

Question 22

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

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

Question 23

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

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

Question 24

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

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

Question 25

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

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

Question 26

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

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

Question 27

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

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

Question 28

These steps in ethical decision making occur in which order?

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

Question 29

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

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

Question 30

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

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

Question 31

The environmental or sustainable accounting package includes:

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

Question 32

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

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

Question 33

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

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

Question 34

The incorrect statement concerning incorporating sustainability into an organisation is:

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

Question 35

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

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

Question 36

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

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

Question 37

Which of these environmental costs is the easiest to measure?

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

Question 38

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

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

Question 39

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

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

Question 40

The process of implementing sustainability is:

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

Question 41

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

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

Question 42

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

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

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) Integrating environmental and social aspects into the four standard perspectives
B) Adding an additional sustainability perspective
C) Developing a separate, individually derived, sustainability scorecard in conjunction with the existing scorecard
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) Fuel usage for transporting inputs
B) Onsite waste
C) Emissions generated from purchased electricity
D) All of the above are indirect emissions

Question 45

The issue that cannot be related to sustainability is:

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