Question 1

Global Reporting Initiative's (GRI)Sustainability Reporting Guidelines provide guidance to best practice reporting.These include reference to the following reporting principles:

Accepted Answer

The Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines reference four reporting principles: inclusivity, materiality, sustainability context, and completeness. These principles align with the GRI's mission of encouraging organizations to report on their sustainability impacts in a way that is transparent, accountable, and contributes to sustainable development.

Question 2

Discounting liabilities using the present value technique is not ecologically sound because:

Accepted Answer

Discounting liabilities using the present value technique can encourage entities to undertake projects with negative future impacts on the environment because it reduces the apparent size of the cost of future environmental clean-up. This can lead to insufficient reserves being set aside for restoring the environment after project completion.

Question 3

Following are reports prepared by reporting entities: $\begin{array}{|l|l|}
\hline \text { I } & \text { Corporate Governance Report } \
\hline \text { II } & \text { Corporate Social Responsibility Report } \
\hline \text { III } & \text { Sustainability Report } \\hline \text { IV } & \text { Directors' Report } \
\hline \text { V } & \text { Annual Report } \
\hline \text { VI } & \text { Social and Environment Report } \
\hline
\end{array}$ Which of the following identifies all stand-alone social reports from the above list?

Accepted Answer

Stand-alone social reports focus on social and environmental aspects, which are covered by the Corporate Social Responsibility Report (II), Sustainability Report (III), and Social and Environment Report (VI).

Question 4

Research in corporate environmental disclosures show that entities typically disclose positive environmental information.This would be consistent with:

Accepted Answer

The answer of Research in corporate environmental disclosures show that...

Question 5

The stand-alone social-responsibility reports voluntarily provided by many companies since the late 1990s include:

Accepted Answer

The stand-alone social-responsibility reports voluntarily provided by many companies since the late 1990s include social and environmental reports and sustainability reports, making option D "all of the given answers" the correct choice.

Question 6

Sustainable cost has been defined by Gray and Bebbington as:

Accepted Answer

Sustainable cost refers to the amount that an organization needs to spend to restore the biosphere back to the state it was in at the beginning of the accounting period. This definition suggests that an organization must consider the environmental impact of its operations and take into account the cost of mitigating that impact when reporting their financial performance.

Question 7

The Shell Group of companies has developed a Social Responsibility Management system that may be described as:

Accepted Answer

The description states that the Social Responsibility Management system developed by the Shell Group of companies is an integrated means for consistently monitoring, measuring, and reporting performance. It aims to reflect the underlying values of the entity in line with the expectations of society and its Statement of General Business Principles. This best describes choice B. Choices A, C, and D also mention social and environmental responsibility, but they include additional details that are not present in the description.

Question 8

The World Business Council for Sustainable Development formed a partnership with the World Resources Institute known as:

Accepted Answer

The partnership between the World Business Council for Sustainable Development and the World Resources Institute is known as the Greenhouse Gas Protocol, which provides widely used standards for measuring and managing greenhouse gas emissions.

Question 9

According to Gray,Owen and Adams,accountability involves:

Accepted Answer

Accountability involves both the responsibility to provide an account of an entity's actions (i.e. reporting and transparency) and the responsibility to undertake certain actions or refrain from taking actions (i.e. being responsible for the financial and economic effects of those actions). Therefore, choice D covers both aspects of accountability.

Question 10

Global Reporting Initiative's (GRI)Sustainability Reporting Guidelines provide guidance to best practice reporting.These include defining the report quality to contain the following qualitative attributes:

Accepted Answer

The Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines define the report quality to contain the following qualitative attributes: reliability, clarity, balance, comparability, accuracy, and timeliness. Option A is incorrect as it misses out on clarity and balance. Option B is incorrect as it includes inclusivity, and materiality which are qualitative attributes of the report's content, rather than the report quality. Option D is incorrect as it adds sustainability context and completeness, which are additional qualitative attributes to the report's content, rather than the report's quality.

Question 11

Which reporting approaches have been adopted in reporting social and environmental performance?

Accepted Answer

The checklist approach involves a list of indicators used to evaluate social and environmental performance, while target-based reporting sets specific objectives to achieve. The eco-balance approach considers the total impact of an organization's actions on the environment, while the full-cost approach takes into account all costs, including social and environmental costs. Therefore, option C is the best choice as it includes all four reporting approaches related to social and environmental performance. Options A and D only include financial reporting approaches, and the value-added statement is not explicitly related to social and environmental performance.

Question 12

An externality can be defined as:

Accepted Answer

An externality is an impact that a reporting organisation has on parties that are external to the organisation, parties that typically have no direct relationship with the organisation. It is not necessarily limited to environmental impacts or economic impacts, as mentioned in options A and D. Option B is incorrect as it only refers to parties with a direct financial relationship with the reporting organisation, which is not always the case with externalities.

Question 13

The Global Reporting Initiative Sustainability Reporting Guidelines (G3)on report content provides an overview of the categories of indicators that may be found in a sustainability report,including:

Accepted Answer

The answer of The Global Reporting Initiative Sustainability Reporting Guidelines...

Question 14

There is significant diversity in the approaches adopted to disclose social and environmental information.Examples of broad approaches adopted include:

Accepted Answer

The eco-balance approach and target-based reporting are both broad approaches that are commonly adopted for disclosing social and environmental information. The eco-balance approach involves providing a comprehensive overview of the social and environmental impacts of a company's activities, while target-based reporting involves setting specific goals and targets for improving social and environmental performance. By adopting both of these approaches, companies can provide a well-rounded and comprehensive view of their sustainability efforts. The zero-based reporting approach, while also a common approach, focuses more on reducing or eliminating negative environmental impacts rather than providing a comprehensive view of a company's overall sustainability performance.

Question 15

The Global Reporting Initiative is:

Accepted Answer

The Global Reporting Initiative was initially convened by the Coalition for Environmentally Responsible Economies, which has links to various organizations including business, accountancy, human rights, environmental, labour, and government organizations. Its aim is to develop environmental reporting guidelines for entities worldwide. None of the other options accurately describe the purpose or background of the Global Reporting Initiative.

Question 16

Applying the traditional financial accounting approach will mean that an entity that pollutes local waterways until they cannot support life will report:

Accepted Answer

The answer of Applying the traditional financial accounting approach will...

Question 17

Which of the following statements is a valid criticism of the accounting profession with respect to its consideration of social and environmental reporting?

Accepted Answer

The answer of Which of the following statements is a...

Question 18

The Global Reporting Initiative has suggested alternative views of the application of the materiality concept in social and environmental accounting,including:

Accepted Answer

The answer of The Global Reporting Initiative has suggested alternative...

Question 19

AccountAbility's work is the AA1000 series of standard which is based on the following principle:

Accepted Answer

The answer of AccountAbility's work is the AA1000 series of...

Question 20

What disclosure does Companies Act require in relation to environmental impact?

Accepted Answer

Section 417 of the Companies Act requires directors to include a review of the business in the Directors' Report, which must consider the impact of the company on the environment.

Quiz 26: Accounting for Corporate Social Responsibility

Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines provide guidance to best practice reporting.These include reference to the following reporting principles: