Deck 15: Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

Question 1

Which sustainability framework highlights the link between sustainability actions and long-term financial performance?

A) Balanced scorecard
B) EVA model
C) Flexible budgeting system
D) Epstein and Roy framework

Answer 1

D

Question 2

Which of the following is an example of social performance in a triple bottom line report?

A) Investments in company infrastructure
B) Investments in community infrastructure
C) Investments in environmental infrastructure
D) Investments in quality systems within an organisation

Answer 2

B

Question 3

Which of the following is an example of environmental performance in a triple bottom line report?

A) Investments in green energy sources for manufacturing
B) Investments in community development
C) Sponsorship of local sports team
D) Revenue growth from prior year

Answer 3

A

Question 4

The triple bottom line report ensures that:

A) companies dominantly focus on their profitability.
B) companies reduce their focus on profitability.
C) companies balance profit concerns with the psychological wellbeing of employees.
D) companies balance profit concerns with their social and environmental performance.

Question 5

Based on Epstein and Roy's sustainability framework,what is a component of sustainability performance?

A) Profit
B) Depreciation
C) Machine hours
D) Human rights

Question 6

Triple bottom line reporting most incorporates a consideration of:

A) economic concerns.
B) social and environmental concerns.
C) only profit concerns.
D) economic,social and environmental concerns.

Question 7

A large part of sustainability accounting practices involves the measurement of:

A) units produced.
B) units sold.
C) government policy.
D) resource consumption.

Question 8

Based on Epstein and Roy's sustainability framework,what is a component of sustainability performance?

A) Work force diversity
B) Profit
C) Inventory turnover
D) Cost control

Question 9

Which of the following statements is an example of economic performance in a triple bottom line report?

A) Sales turnover
B) Recycling percentage
C) Social sustainability indicators
D) Re-use percentages

Question 10

Which of the following decisions most involves the consideration of social sustainability practices,from an accounting perspective?

A) Spending on a product to increase its quality for customers
B) Spending on social projects around the building of communities surrounding mining operations
C) Spending to increase efficiency of machine output
D) Revenues from environmental programs

Question 11

Which of the following decisions most involves the consideration of environmental sustainability practices,from an accounting perspective?

A) Spending on a product to increase its quality for customers
B) Spending on social projects around the building of communities surrounding mining operations
C) Spending to increase efficiency of machine output
D) Spending on technologies to reduce the impact of machine use on plant life

Question 12

Sustainability is referred to as being:

A) organisations that can last longer than others.
B) the pursuit of endeavours which prolongs the use of resources.
C) any activity that is of a higher than average standard.
D) the pursuit of green policies at all cost.

Question 13

Sustainability accounting practices can be categorised into:

A) social accounting and environmental accounting.
B) revenue accounting and cost accounting.
C) cost accounting and social accounting.
D) profitability accounting and sales accounting.

Question 14

Which of the following is not an example of environmental performance in a triple bottom line report?

A) Increasing ratio of water recycled to water used
B) Sponsorship of environmental programs in local communities
C) Increasing recycling programs in the workplace
D) Increasing work-life balance for employees

Question 15

An example of a sustainability related KPI might be:

A) ROA.
B) direct labour cost.
C) carbon emissions ratios.
D) staff turnover.

Question 16

Management accounting most clearly contributes to sustainability by:

A) identifying budgets for environmental companies.
B) helping to understand costs for running environmental programs.
C) providing a cost benefit analysis of social and environmental practices.
D) determining revenues from environmental projects.

Question 17

Which of the following stakeholders of an organisation are most likely to be directly impacted by its external costs?

A) Environment
B) Managers
C) Suppliers
D) Government

Question 18

All of the following statements are true except:

A) External costs are the direct costs impacting an organisation.
B) Sustainability activities can be aligned to long term financial performance.
C) External costs are sometimes significant in multinational organisations.
D) Sustainability activities involve social and environmental factors.

Question 19

Triple bottom line reporting considers:

A) economic,social and psychological performance.
B) social,economic and environment performance.
C) psychological,economic and social performance.
D) social,economic and management performance.

Question 20

Which of the following would not be considered an external cost?

A) Direct labour cost
B) Community degradation from an organisation's operations
C) Lowering school completion rates in village communities - youths choosing to work instead in factories
D) Environmental degradation from organisational operations

Question 21

If BHP Billiton is concerned about the costs of monitoring existing levels of carbon emissions,what type of environmental cost are they concerned with?

A) Prevention costs
B) Appraisal costs
C) Internal failure costs
D) External failure costs

Question 22

Which of the following elements does not relate to the environmental aspect of triple bottom line reporting?

A) GHG emissions
B) Water use
C) Spills onto waterways
D) Exports

Question 23

Which of the following elements relates to the social aspect of triple bottom line reporting?

A) GHG emissions
B) Revenues
C) Donations to community
D) Exports

Question 24

Which of the following elements relate to the economic aspect of triple bottom line reporting?

A) Training programs
B) Safety programs
C) Donations to community
D) Exports

Question 25

Which of the following elements does not relate to the social aspect of triple bottom line reporting?

A) Labour standards
B) Revenues
C) Donations to community
D) Health and Safety

Question 26

If BHP Billiton is concerned about the cost of implementing technologies that minimise GHG emissions in the future,what type of environmental cost are they concerned with?

A) Prevention costs
B) Appraisal costs
C) Internal failure costs
D) External failure costs

Question 27

If BHP Billiton is concerned about the cost of fines for excessive GHG emissions,what type of environmental cost are they concerned with?

A) Prevention costs
B) Appraisal costs
C) Internal failure costs
D) External failure costs

Question 28

Companies focusing on sustainability value chains tend to consider which of the following concerns?

A) Environmental and psychological
B) Managerial and psychological
C) Investment and managerial
D) Environmental and social

Question 29

If BHP Billiton is concerned about the medical costs for looking after employees with health concerns,they are concerned with:

A) prevention costs.
B) appraisal costs.
C) internal failure costs.
D) external failure costs.

Question 30

Which of the following stakeholders of an organisation are least likely to be directly impacted by its external costs?

A) Environment
B) Society
C) Suppliers
D) Managers

Question 31

Which of the following is an example of an appraisal cost?

A) Fines for breach of environmental standards
B) Employee health costs
C) Implementation costs of new technology minimising risk of environmental damage
D) Costs to monitor existing environmental systems in the organisation

Question 32

Which of the following is an example of an external failure cost?

A) Fines for breach of environmental standards
B) Employee health costs
C) Implementation costs of new technology minimising risk of environmental damage
D) Costs to monitor existing environmental systems in the organisation

Question 33

Which of the following is an example of a prevention cost?

A) Fines for breach of environmental standards
B) Employee health costs
C) Implementation costs of new technology minimising risk of environmental damage
D) Costs to monitor existing environmental systems in the organisation

Question 34

Which of the following elements does not relate to the economic aspect of triple bottom line reporting?

A) Expenses
B) Profit
C) Donations to community
D) Exports

Question 35

Which of the following statements is true?

A) External costs are the direct costs impacting an organisation.
B) Sustainability activities can only be aligned to long-term financial performance.
C) External costs are immaterial in multi-national organisations.
D) Sustainability activities involve social and environmental factors.

Question 36

Sustainability value chains attempt to show how:

A) profit can be earned from being more efficient.
B) costs can be minimised by focusing on productivity.
C) organisational sustainability activities can lead to superior business outcomes.
D) all of these responses are correct.

Question 37

Which of the following statements is true?

A) Prevention costs are less desirable than external failure costs.
B) Appraisal costs are always significant.
C) Prevention and appraisal costs are usually more desirable than internal failure and external failure costs.
D) Direct materials costs are always environmental costs.

Question 38

Which of the following elements relates to the environmental aspect of triple bottom line reporting?

A) GHG emissions
B) Safety programs
C) Donations to community
D) Exports

Question 39

What are the four environmental cost types in organisations?

A) Profit,revenues,costs,expenses
B) Variable and fixed costs,variable and fixed expenses
C) Prevention,appraisal,internal failure and external failure costs
D) Prevention,appraisal,variable and external failure costs

Question 40

Which of the following is an example of an internal failure cost?

A) Fines for breach of environmental standards
B) Employee health costs
C) Implementation costs of new technology minimising risk of environmental damage
D) Costs to monitor existing environmental systems in the organisation

Question 41

What are appraisal costs? How are they different to prevention costs?

Question 42

What external costs might BHP Billiton,a large Australian mining company,be concerned about?

Question 43

'Management accounting cannot contribute to our understanding of sustainability issues in organisations.' To what extent do you agree or disagree with this statement?

Question 44

Which of the following expenses is most likely to be an external failure cost?

A) Regulatory fine
B) Salary expense
C) Quality control expenses
D) GHG monitoring expense

Question 45

Why can't accounting systems capture external costs at present?

Question 46

Identify two sustainability related KPIs and explain how they raise an organisation's understanding of its sustainability performance?

Question 47

Explain how external costs might impact the management of Nike Inc. ,the world famous clothing brand,and how accounting systems might help better understand these challenges.

Question 48

What are prevention environmental costs? Please explain with an example.

Question 49

What are internal failure costs? How do they impact the organisation in the short and long term?

Question 50

The James Hardie Corporation has been supplying building materials since the early to mid 20th century.Its earlier products used asbestos,a material we now know to be toxic and dangerous to those that come into contact with it.As a consequence of the ill health suffered by its employees,James Hardie incurred significant environmental costs,which it continues to be held accountable for even today.It is doing its best to minimise these adverse costs,but they often nevertheless must be incurred.
Please identify any possible prevention,appraisal,internal failure and external failure costs that might have to be considered by James Hardie.

Question 51

Explain the main factors that might be considered by the Harvey Norman organisation (a large electronics retailer),if they were to implement a triple bottom line report:

Question 52

Consider the operations of a cigarette manufacturer such as Benson and Hedges - what types of external costs might they have to consider?

Question 53

Identify three value creation levers and discuss how sustainability initiatives might aid their attainment.

Question 54

Why is triple bottom line reporting more comprehensive in its measurement of performance than traditional financial reporting?

Question 55

How might the distribution,sales/marketing,re-use and recycling stages of a value chain be considered from a sustainability perspective? Please use Woolworths (a large Australian grocery chain)to illustrate examples.

Question 56

How might the Epstein and Roy framework aid in the justification of sustainability investments?

Question 57

How might the R&D,sourcing and production stages of a value chain be considered from a sustainability perspective? Please use Coca-Cola Amatil (CCA)to illustrate examples.

Question 58

Consider the following five environmental costs and identify them as any one of the four environmental costs:
a.
R&D to develop lower GHG emission processes
b.
Fines for toxic spills into an adjoining river
c.
Injuries suffered by staff in the course of organisational operations
d.
Fatality in the workplace
e.
Thermometer installation costs to monitor the temperature in a factory,to ensure staff health

Question 59

What are external failure costs? Please provide two examples of types of external failure costs.

Question 60

Three companies in the same industry incur $100 000 in environmental costs - consider these costs below - identify the company that you think is the best,and the worst performer from a sustainability perspective,and please provide explanations for your selection.
$\begin{array}{llllll}&\text { Prevention }&\text { Appraisal}&\text { Internal }&\text { External failure}&\text { Total costs }\\&&&\text { failure }\\\text { Company A } & \$ 10 ? 000 & \$ 20 ? 000 & \$ 30 ? 000 & \$ 40 ? 000 & \$ 100 ? 000 \\\text { Company B } & \$ 25 ? 000 & \$ 25 ? 000 & \$ 25 ? 000 & \$ 257000 & \$ 100 ? 000 \\\text { Company C } & \$ 40 ? 000 & \$ 30 ? 000 & \$ 20 ? 000 & \$ 10 ? 000 & \$ 100 ? 000\end{array}$

Question 61

Describe three external costs that might be related to Qantas.Please explain your rationale:

Question 62

'High levels of environmental costs are acceptable if they are prevention costs.' Do you agree? Please explain.

Question 63

How might the sustainability value chain perspective affect how the National Australia Bank (NAB)conducts its operations?

Question 64

Three companies in the same industry incur $200 000 in environmental costs - consider these costs below.Identify the company that you think is the best,and the worst performer from a sustainability perspective,and please provide explanations for your selection.
$\begin{array}{rrrrrr}\text { Company A } & \$ 10 ? 000 & \$ 20 ? 000 & \$ 100 ? 000 & \$ 70 ? 000 & \$ 200 ? 000 \\\text { Company B } & \$ 50 ? 000 & \$ 50 ? 000 & \$ 10 ? 000 & \$ 90 ? 000 & \$ 200 ? 000 \\\text { Company C } & \$ 180 ? 000 & \$ 20 ? 000 & \$ 0 & \$ 0 & \$ 200 ? 000\end{array}$