Question 1

The Business Council of Australia views the stakeholders of a business as those parties which:
A) Can affect the operations of a business
B) Are affected by the operations of a business
C) Both can affect, and are affected by, the operations of a business
D) None of the given options are correct

Accepted Answer

A

Question 2

'Sustainable cost' is the amount an organisation must spend to:
A) Maintain its current level of social and environmental performance
B) Return the biosphere to the state it was in at the beginning of the accounting period
C) Sustain its current level of profitability, given increasing societal expectations for improved social and environmental performance
D) Adequately report its financial, social and environmental performance in accordance with the ethical formulation of stakeholder theory

Accepted Answer

B

Question 3

The main problem for triple bottom line accounting is that social and environmental information is not:
A) Comparable
B) Relevant
C) Reliable
D) Understandable

Accepted Answer

The main problem for triple bottom line accounting is that social and environmental information is not comparable. While financial information can be easily compared, social and environmental information often lacks standardization and can vary greatly between companies and industries, making it difficult to compare and evaluate.

Question 4

A 'social audit' is when an organisation:
A) Obtains independent verification on its social disclosures
B) Obtains independent verification on its social and environmental disclosures
C) Assesses its performance in relation to stakeholder expectations of social performance
D) Assesses its performance in relation to stakeholder expectations of social and environmental performance

Accepted Answer

A 'social audit' assesses an organization's performance in relation to stakeholder expectations of both social and environmental performance. Therefore, the best choice is D.

Question 5

The 'shareholder primacy' view of corporate reporting implies that:
A) Regulators should mandate greater social and environmental reporting
B) Reporting should primarily meet the needs of those with a financial stake in the organisation
C) Organisations will voluntarily adopt greater social and environmental reporting
D) All of the given options are correct

Accepted Answer

The 'shareholder primacy' view of corporate reporting suggests that reporting should primarily serve the financial interests of those who have invested in the organization. This view prioritizes maximizing shareholder value and profit above any social or environmental concerns. Therefore, the answer is B. Options A and C are not consistent with the shareholder primacy view, and D is incorrect since only option B is correct.

Question 6

A company reporting on its social and environmental performance could be explained by:
A) Legitimacy Theory, if management believed that the report would enhance the company's licence to operate
B) Managerial Stakeholder Theory, if management believed that reporting would influence the perceptions of powerful stakeholders
C) Institutional Theory, if management believed that by reporting they would gain approval from powerful stakeholders
D) All of the given options are correct

Accepted Answer

All of the given options are correct. Legitimacy Theory suggests that companies report on their social and environmental performance as a way to maintain their social license to operate. Managerial Stakeholder Theory suggests that companies report to influence the perceptions of powerful stakeholders, such as investors and customers. Institutional Theory suggests that companies report to gain approval from stakeholders, such as regulators or industry associations. All three theories could apply to a company reporting on its social and environmental performance.

Question 7

The main contribution of frameworks such as the Global Reporting Initiative is that they enable:
A) Comparison of social and environmental performance between companies
B) Aggregation of social and environmental performance to a single 'sustainability' number
C) Improved social and environmental performance
D) None of the given options is correct

Accepted Answer

The main contribution of frameworks such as the Global Reporting Initiative is that they enable comparison of social and environmental performance between companies. This is achieved through the use of standardized reporting guidelines and metrics that allow for greater transparency and accountability. By enabling companies to compare their own performance to that of their peers, these frameworks promote continuous improvement and can help drive positive change across industry sectors.

Question 8

The drivers towards greater corporate social responsibility identified by the Business Council of Australia did not include improved:
A) Employee recruitment and motivation
B) Competitiveness and market positioning
C) Social and environmental performance
D) Operational efficiency

Accepted Answer

The answer of The drivers towards greater corporate social responsibility...

Question 9

The prevalence of social and environmental reporting is
A) Declining
B) Increasing
C) Stable
D) None of the given options is correct

Accepted Answer

The global trend shows that social and environmental reporting is increasing. Many companies are becoming more transparent about their sustainability practices and are taking steps towards ensuring that they are socially and environmentally responsible. This is in response to increasing pressure from consumers and investors who are interested in sustainable business practices.

Question 10

It is commonly asserted that businesses should be sustainable because:
A) The interests of business, society and the environment are aligned in the medium term
B) The interests of business, society and the environment are aligned in the long term
C) The interests of business, society and the environment are aligned in the short term
D) All of the given options are correct

Accepted Answer

The interests of business, society and the environment are aligned in the long term. Long-term sustainable business practices are beneficial for society and needed for the environment, whereas short-termism and profit maximization often harm both. Therefore, businesses should adopt sustainable practices that take the long-term view to ensure their own continued success while also benefiting society and the environment. Option A is partially correct, but it is not just the medium term where the interests align; it is the long term where the interests are fully aligned. Option C is incorrect as short-term interests are often in conflict with sustainable practices. Option D is incorrect as not all options are correct.

Question 11

The Global Reporting Initiative Guidelines are:
A) A mandatory framework containing a list of organisational financial, social and environmental performance indicators
B) A mandatory framework containing a list of governmental financial, social and environmental performance indicators
C) A voluntary framework containing a list of organisational financial, social and environmental performance indicators
D) A voluntary framework containing a list of governmental financial, social and environmental performance indicators

Accepted Answer

The Global Reporting Initiative (GRI) Guidelines are a voluntary framework that contains a list of organizational financial, social, and environmental performance indicators. GRI guidelines are widely used by companies to report on their sustainability performance. The GRI Guidelines are not mandatory, but many companies choose to use them to improve their sustainability reporting and increase transparency with stakeholders.

Question 12

Which of the following is false?
A) Many companies believe that social and environmental objectives can be achieved without sacrificing profitability
B) Many companies believe that social and environmental issues are becoming more important to their customers
C) Many companies believe that consideration of social and environmental issues is necessary for profitable growth
D) None of the given options are correct

Accepted Answer

All of the given options are true, so none of them are false.

Question 13

'Enlightened self-interest' means that businesses:
A) Will sacrifice financial returns in order to improve social and environmental performance
B) Will not sacrifice financial returns in order to improve social and environmental performance
C) Do not believe there is a conflict between financial returns and social and environmental performance
D) None of the given options is correct

Accepted Answer

'Enlightened self-interest' suggests that businesses recognize that there is no conflict between financial returns and social and environmental performance. In other words, a company can prioritize its own interests and profitability while also being socially and environmentally responsible. This approach recognizes that these aspects are interconnected and that acting responsibly in one area can ultimately benefit the company as a whole. Therefore, option C is the correct answer.

Question 14

Problems with the concept of the 'triple bottom line' do not include :
A) It suggests that the social, environmental and economic aspects of an organisation are not interconnected
B) The term is not widely used or understood
C) It is not possible to reduce social, environmental and economic aspects of an organisation to a 'common currency'
D) The concept of maximisation is difficult to apply to social and environmental aspects of corporate performance

Accepted Answer

The statement mentions that the term is not widely used or understood, but this is not a problem with the concept itself. The other options listed are problems with the triple bottom line concept.

Question 15

Reasons that traditional financial accounting may be unable to reflect the social and environmental impact of organisations do not include:
A) The social and environmental impact of an organisation cannot be verified
B) The social and environmental impact of an organisation is often considered immaterial
C) Traditional financial accounting ignores the diminution of assets which are not controlled by the entity
D) Traditional financial accounting may categorise items such as pollution permits as assets

Accepted Answer

The answer of Reasons that traditional financial accounting may be...

Question 16

Including all affected stakeholders in a dialogue with the corporation may be difficult because:
A) There may be multiple stakeholder groups in diverse geographic regions
B) Stakeholders may be reluctant to express their honest views to the company for fear of reprisal
C) The stakeholders may not be aware of the corporation's activities
D) All of the given options are correct

Accepted Answer

All of the given options are correct. Including all affected stakeholders in a dialogue with the corporation may be challenging due to the diversity of stakeholder groups, reluctance of stakeholders to express their honest views, and stakeholders' lack of awareness of the corporation's activities.

Question 17

The Brundtland Report defined 'sustainable development' in terms of:
A) Intergenerational equity
B) Intragenerational equity
C) Both inter- and intra-generational equity
D) None of the given options is correct

Accepted Answer

The answer of The Brundtland Report defined 'sustainable development' in...

Question 18

Researchers have concluded that there is a demand for environmental and social disclosures based on:
A) Surveys of stakeholders
B) Examining the impacts on share prices of company disclosures
C) Examining the impacts on share prices by independent rating agencies
D) All of the given options are correct

Accepted Answer

The answer of Researchers have concluded that there is a...

Question 19

A 'social audit' may assist an organisation to:
A) Identify areas where stakeholders believe it is deficient
B) Avoid losing its 'licence to operate'
C) Enhance its reputation
D) All of the given options are correct

Accepted Answer

A social audit is a process of evaluating, measuring, reporting, and ultimately improving an organization’s social and ethical performance. It allows organizations to identify areas where stakeholders believe it is deficient, enhance their reputation, and avoid losing their 'licence to operate.' Therefore, all of the given options are correct.

Question 20

Reasons that traditional financial accounting may be unable to reflect the social and environmental impact of organisations do not include:
A) Externalities are difficult to measure
B) Traditional financial accounting typically discounts future liabilities to present value
C) Accountants are unable to understand the social and environmental impacts of an organisation
D) Traditional financial accounting adopts the 'entity assumption'

Accepted Answer

This option is incorrect as it implies that accountants are not able to understand social and environmental impacts, when in reality they may simply lack the tools or mechanisms to accurately measure these impacts. Options A, B, and D are valid reasons why traditional financial accounting may not reflect social and environmental impacts.

Quiz 9: Extended Systems of Accountingthe Incorporation of Social and Environmental Factors Within External Reporting

The Business Council of Australia views the stakeholders of a business as those parties which:

'Sustainable cost' is the amount an organisation must spend to:

The main problem for triple bottom line accounting is that social and environmental information is not:

A 'social audit' is when an organisation:

The 'shareholder primacy' view of corporate reporting implies that:

A company reporting on its social and environmental performance could be explained by:

The main contribution of frameworks such as the Global Reporting Initiative is that they enable:

The drivers towards greater corporate social responsibility identified by the Business Council of Australia did not include improved:

The prevalence of social and environmental reporting is

It is commonly asserted that businesses should be sustainable because:

The Global Reporting Initiative Guidelines are:

Which of the following is false?

'Enlightened self-interest' means that businesses:

Problems with the concept of the 'triple bottom line' do not include :

Reasons that traditional financial accounting may be unable to reflect the social and environmental impact of organisations do not include:

Including all affected stakeholders in a dialogue with the corporation may be difficult because:

The Brundtland Report defined 'sustainable development' in terms of:

Researchers have concluded that there is a demand for environmental and social disclosures based on:

A 'social audit' may assist an organisation to:

Reasons that traditional financial accounting may be unable to reflect the social and environmental impact of organisations do not include: