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BUACC 2614 – Management Accounting 2
Semester 2, 2012
Group Assignment ANSWER AT THE END
According to Martin and Steele (2010, p.13), “The two principal
professional associations in Australia – CPA Australia (the CPA) and
the Institute of Chartered Accountants in Australia (the Institute)
have indicated their awareness of the significance of issues of
sustainability reporting and development of appropriate skill sets in
word and in deed. The commitment of both organisations to
sustainability principles has been shown by their adoption of, and
support for, sustainability-focused reporting approaches and by their
opting to take up membership of the Accounting for Sustainability
Forum”.
In a two-part essay:
a. Consider the above. Discuss the stance and initiatives of the
Australian accounting profession on corporate social
responsibility (CSR) and sustainability. Include your views on
the role of accounting and the accountant on CSR and
sustainability.
Go to:
http://www.billabongbiz.com/phoenix.zhtml?c=154279&p=iro
l-community.
http://www.visy.com.au/?id=106
http://www.westpac.com.au/about-westpac/sustainability-and-
community/performance-reporting/stakeholder-impact-reports/
b. Select one of the above companies. Discuss the way in which
the organisation has demonstratedits social and environmental
accountability.
Good startingpoints for your research are: the textbook (Chapter 17);
the IFAC’s International Guidance Document on Environmental
Management Accounting and the websites of the CPA and ICAA.
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For example, go to:
http://www.cpaaustralia.com.au/cps/rde/xchg/cpa-
site/hs.xsl/knowledge-practice-toolkit-green-accounting.html
Please note the following:
Format: Essay
Contribution to overall assessment: 25%
Length: 2000 – 2500 words
Your work must comply with the University’s General Guide for
the Presentation of Academic Work.
http://www.ballarat.edu.au/current-students/publications,-
policies-and-forms/general-guide-for-the-presentation-of-
academic-work
This is a group-assignment. Each group needs to have 2 to 3
members in it. Please organise yourselves into groups.
Please make sure that names and ID numbers of all group
members are stated on the cover sheet of your submission.
As this is a group assignment, each member of a group is awarded the
same mark. Workingin groups has its pros and cons. I am sure that
you will hold constructive and energetic group discussions on the
issues at hand. In case of any disagreements, you will be able to
resolve them in a democratic and rational way. There will be times
when you may have to agree to disagree with each other. Invariably
different groupmembers bring different skills to a project; it is up to
you to make the best of it. I believe one can learn a lot by discussing
the issues with one’s colleagues.
If you happen to find your group members are “not pulling their
weight” or there are problems with any member’s commitment, then
please try to resolve those issues amongst yourselves. Open and
honest communication always helps. If you are unable to resolve
these issues, you are most welcome to see me and we will try to sort
out the problems together. Do this as soon as possible and certainly
before the due date. (Please adapt this to suit your group).
Best wishes
Geeta
BUACC2614, Management Accounting 2
Semester 2, 2012
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Group Assignment
Bases of assessment HD P F
Content - Identification of relevant issues.
Research - Selection of relevant material.
A demonstration of critical evaluation of the
material.
Expression of your viewpoint (and not a catalogue of
quotes/ others’ ideas).
Expression - clarity, style (formal and academic),
coherence in writing, grammar, punctuation,
spellings and sentence structure.
A logical flow of argument at both the paragraph
level and the overall text level.
Use of supporting arguments.
Use of literature to support the argument.
Structure – Synopsis (stated the topic, reflected main
arguments and identified conclusions reached).
Introduction (clearly stated the essay question;
outlined the plan for answering the question).
Discussion in appropriately linked sections and
paragraphs.
Conclusion (no new material; reiterated the main
line of argument).
Referencing procedure (within the text, and at the
end of the text).
Appropriately styled and punctuated bibliography.
Overall Presentation – including cover page, line
spacing, page numbering.
GRADE:
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Environmental Aspect9
Economic Aspect9
Social Aspect9
Financial and Other Aspects10
Initiatives in Sustainability Reporting10
Role of CPA Australia and ICAA10
CPA Australia11
ICAA11
CSR, Sustainability Reporting and Accounting Profession in Australia11
Part 2 –the Visy Industries12
Environmental and Social Accountability in Business –the Visy case13
Overview of the Company:13
Social and Environmental Accountability of Visy:13
Society and Community Relations13
Economic Sustainability14
Power, Fuel and Research14
Visy in Action and Work14
A Brief evaluation of Visy Industries15
Conclusion15
References:16
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Introduction
Business is a part of the society. It cannot be separated from the concept of society.
Thus, business has some works to do for the welfare of the society. It is termed as the
corporate social responsibility. In order to keep a record of this corporate social
responsibility, the environment management accounting has emerged. It keeps records
of it and presents accounting information of such. In maintaining the corporate social
responsibilities, accounting tools are used widely and successfully and hence the
importance of the accountants is on increase. The accounting bodies in Australia –the
CPA Australia and the ICAA are taking steps to adopt the situation and give a
concrete shape of the situation and ensure sustainability.
Part 1: CSR, Sustainability and the Role of Accountants
Accounting, Sustainability and CSR
The present business world considers both the profit and people in the same way to
earn the intended profit and long-term sustainability in the market. Thus, the concept
of Corporate Social Responsibility (CSR) (Bacher 2007) (Philip & Nancy n.d.) has
evolved throughout the years. In this phase, the role of accountants has come to light
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in maintaining an eye over the whole process. In maintaining sustainability, the basic
is also now rooted in the roles of accountants. As a result, the Environmental
Management Accounting (EMA) (Keil 2004) (Martin, Páll M. & Stefan 2009) has
been emerged. It’s a new concept in the field of accounting.
Environmental Management Accounting (EMA) – The Environmental
Management Accounting (EMA) is defined as the process of identifying, collecting,
estimating, analyzing, reporting to both internal and external authorities, usage of
inventories and materials, flow of energy information, environment information of
costs of various nature and such other information relating to the organization’s
monetary and non-monetary information for both the general and environment
relating decision-making purpose of the organization. The environment management
accounting is also called as green accounting, environment accounting. It account for
the usages of the resources of the organization in the light of the environment and its
effects on it.
Sustainability – Sustainability means that’s doing business in such a way which
entails both the sides as to take into account the organization’s full motives,
objectives, goals and the people, society overall the planet mother earth and it’s
welfare. (Dexter Dunphy et al 2000) The future well-being, long-term impacts on the
society, etc. are considered in the sustainability concept.
Corporate Social Responsibility (CSR) – The corporate social responsibility (CSR)
denotes the responsibility of the business organization or the corporation’s
responsibilities towards the human being, towards the welfare of the mass, towards
the society as a whole. Doing something for the society not for the profit motive, from
the responsibility sense is corporate social responsibility. In measuring the corporate
social responsibility, the EMA is used as a wide practice in the present accounting
profession.
Sustainability Reporting –Full Synopsis
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In maintaining and complying with CSR activities and sustainability, the accounting
bodies are maintaining various aspects from the accounting point of view. The
recording, analyzing, presenting, interpreting are various steps of accounting to
maintain these. The awareness of preserving water resources, natural fuels, etc. is a
part of this process (Bogdan, Ioan & Sandu 2007). In promoting sustainability the
insurance of accountability for works done, transparency in decision making,
encouraging the stakeholders’ participation in these processes for the long-term
benefit, facilitating the society by the works of the accountants are basic stages of
sustainability. Sustainability reporting embraces the organization’s environmental,
economic, social, financial and overall the entire surroundings, that is, the
environment at large. All these have impact on the sustainability of the organization.
Environmental Aspect
Organizations can maintain sustainability in terms of environmental aspect by the use
of green technologies, reduction of use of papers, recyclable materials, and reduction
in the level of harmful chemicals in the air, water and soil. (GRI , 2012) CSR and
sustainability reporting indicates these in the financial statements and adds extra
values for the stakeholders and fulfills this aspect.
Economic Aspect
Though it seems that, attaining sustainability costs higher from the general practices,
it actually reduces many costs drastically. It reduces job rotations, job dissatisfactions,
does well for the society at large and increases both economic and non-economic
values for the stakeholders and society.
Social Aspect
The CSR activities are done for the society. Nowadays, many governments allow
many facilities for that, especially in terms of rebate in tax, investment facilities and
many more. As a result, the sustainability reporting reports all these and fulfills the
social aspects and runs the business smoothly (GRI , 2012).
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Financial and Other Aspects
In the recent years, CSR and sustainability reporting have been major issues in the
mind of stock holders, bankers, brokers, and other regulatory agencies. The
environmentally friendly organizations are getting extra attention and value in the
market. Basically, sustainability reporting encompasses almost all the elements of the
environment. So, everything is interrelated and important in sustainability reporting.
In measuring the system some steps are maintained –initiative, setting objectives,
state of art, satisfactory improvements. To install an indicator system several points
can be kept in mind.
Relevance should be present in the data presented and the works done.
The systems used in the process must be understandable; otherwise the main
objective will be futile.
The accounting system and the standards followed, the procedures used should be
used as such over the years to maintain consistency. (Broad & John 1999)
The data collected and analyzed should be able to have a balanced view and it should
be comparable with one year data with another and with one concern with the other.
Initiatives in Sustainability Reporting
In maintaining sustainability rigorous steps are to be maintained. Sometimes the
initial efforts are very important since these paves the way to higher excellence. The
two accounting bodies –the CPA Australia and the ICAA are the pioneer and the
guide in maintaining sustainability reporting. (Moradzadeh & Ahmadzadeh 2006)
Keeping records of the classes, preferences, behavior, etc. can be a source of future
references and a raw format can help the managers to keep track of the various
measures taken to report and take various decisions regarding the environment and the
corporate social responsibilities.
Role of CPA Australia and ICAA
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The different accounting professional institutes – CPA Australia and the Institute of
Chartered Accountants (ICAA) in Australia have taken many initiatives to cope up
with the EMA and reporting of organization’s CSR. Adopting environmental
standards like ISO 14001, (Hillary 2000) (Nicholas P. & Avrom 2001) (Kausek 2007)
ISO 14031 (Kuhre 1998) (Raimund & Peter 2004) (Thomas 2005) to protect the
interests of the mass people along with the organization.
CPA Australia
This is one of the largest bodies in Australia in maintaining and practicing
sustainability accounting. It publishes journals, conducts researches, and arranges
sessions to train up professionals in this field. (CPA 2012; ICAA , 2012) It works on
identifying opportunities in implementing the sustainability reporting, adopting
standards, making policies, publishing ideas, and many more. CPA Australia
maintains sustainability reporting in its own financial reporting. The Global Reporting
Initiative (GRI) audited its financial reports and it has ‘Corporate Social
Responsibility discussion group’ in promoting awareness. It conducts activities for the
environmental, social and governance activities in various contexts (CPA, 2012).
ICAA
ICAA is the second largest accounting body in Australia that works to promote
sustainability accounting. Australian government announced the transformation of the
country into a low carbon producing country (ICAA , 2012). As per the ‘National
Greenhouse Energy Reporting Scheme (NGERS)’, businesses are required to report
of their activities to reduce emission of carbon. It has published many articles to
reduce the carbon emission in organizations. ICAA also provides support to various
stakeholders.
CSR, Sustainability Reporting and Accounting Professionin
Australia
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The accounting bodies –the CPA Australia and the Institute of Chartered Accountants
in Australia are working constantly in improving the CSR reporting activities of
accountants by the use of EMA. The reporting of the CSR activities in the financial
statements is on increase. Many firms are preparing financial statements in
accordance with the available norms. The recording of reduction in air pollution has
been awarded in recent years. Some countries are buying the reduction in pollution
certificates from the less pollution generating countries.
The EMA basically gives importance and weight on the accounting procedures
regarding environment costs, natural resources, cost information relating these issues,
pollution reduction costs, compliance with various standards and regulations relation
environment, that is, relating green movement in the businesses, internal and external
parties, the stakeholders and the overall cost and benefit of the process of EMA
system. Energy and fuel consumption, emission of nature pollutants, their reduction
facility costs are the focus point of EMA (M & P 1997). These are also a part of the
CSR activities.
Accountants are nowadays considered as a key role playing factor in reporting the
corporate social responsibility and maintaining sustainability. The future security is a
concerning factor that has, basically, transformed the business philosophy regarding
profit and growth. The short-term profit by endangering the environment is no longer
supported by the business community and the regulatory bodies are strict in non-
environment friendly industries. Many have observed that, maintaining the corporate
social responsibility increases the profit margin very well as most investors prefer
green organizations. (Plender 1998) The movement of ‘go green’ has been a well
driving force for many industries and aspect.
Part 2 –the Visy Industries
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Environmental and Social Accountability in Business –
the Visy case
Overview ofthe Company:
The Visy Company was established in 1948 and it’s the largest privately owned paper
recycling and paper packaging company in Australia. Its motto is “for a better world”.
It has more than 5,500 employees worldwide and runs its businesses over 120 areas
across different countries like Thailand, Vietnam, USA, China etc. The US Visy is
known there as Pratt Industries and is a sister concern having around 3,500 staffs
(Visy 2012). Though it was launched in Melbourne, with its greater excellence and
managing power it’s now in many areas.
Visy maintains a strong base of sustainability which they call it as the essentials of
their business. They use most well-known brands for the betterment of the consumers.
Visy is a well-known company and it maintains the sustainability throughout all its
actions and activities. (Visy 2012)
Social and EnvironmentalAccountabilityof Visy:
Visy Industries publishes sustainability reports in its financial statements regularly.
This report gives evidence of its corporate social responsibility, social and
environmental accounting. The common sectors are –community, environment,
power, fuel and strategy.
Societyand Community Relations
The achievement of the Visy Industries mainly depends on the relationship with other
people. They keep good relationships with their customers, suppliers, to nurture a
very good output. They run the company as it can serve the society for the wellbeing
of the mass. Visy concentrates on the core sustainability objectives in maintaining
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relationship with the community and society. The Visy maintains three core elements
in conducting their business. These are called to be its business running principles.
Economic Sustainability
Visy concentrates in doing economic actions and these outcomes are the result of
extensive research center. The Visy keeps record of the transactions made for the
betterment of the society. The accounting of its show its evidence. (Visy 2012) They
believe in sustainable growth and long-term visions as these can be achieved through
economic sustainability actions.
Power, Fuel and Research
The Visy is using the clean energy and investing more and more on it. The clean
energy is the production of electricity and another form of energy –generally heat.
Normally, when making electricity from heat, like burning coal, a lot of heat emits
and only a few is used for the production of the electricity.
Visy conducts research program on a regular basis. (Visy 2012) It has a separate
research team in its office. They are always given the marketing preferences in
conducting their research. Various types of things made from the scrap and waste
materials are two things that they got at the very outset of the business.
Visy in Action and Work
Visy usages recyclable materials in its works. Its many of the products have been
recycled many times over time. (Visy 2012) The various types of works involved,
Visy concentrate its activities towards a greener earth. Visy tries to ensure minimum
level of pollution that are created by its course of action. Since 2009, it increased its
usages of paper by 30%, consumption of water decreased by 8% in per tonne of
paper, decreased by 11% its landfill per tonne of garbage. (Visy 2012) The company
accounts for its each and every work to reduce the bad effect of the mechanical
processes that harms the environment and tries hard to lessen that. The constant
innovation in this field sometimes causes some extra-ordinary ideas to be
implemented.
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A Briefevaluation of Visy Industries
The Visy’s objective is to make the world a bit better place to live in. For that very
reason, they are trying to recycle all most all types of wastages and reproducing many
essential things in our daily life. For the society at large, it’s creating many
employments, many opportunities that evolve with this business. (Visy 2012) These
need to catch up by the diligent effort. The cost data for doing all these works are
important and need to analyze the projects for the measurement of the social and
environment accountability.
Conclusion
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The accounting profession is a very age old profession. But many new branches are
emerging day by day. Such one is the environment management accounting. This
accounting system takes into account the environmental factors in reporting.
Sustainability, focus on the both internal and external affairs of the organization are
some of the features. Various accounting bodies are also concerned with the situation.
They are upgrading themselves with the new system. The skilled persons in
accounting can easily manage this environment management accounting. The
reporting in this method brings satisfaction to the shareholders and the market price of
the shares increases as a company without CSR is considered as weak. In maintaining
proper accountability and sustainability the roles of accountants is very important.
References:
Bacher, C 2007, Corporate Social Responsibility, GRIN Verlag.
Bogdan, A, Ioan, I & Sandu, R 2007, 'Les rapports narratifs du management, sontils
équilibrés ? Etude de cas sur la reconnaissance du capital intellectuel dans les rapports
annuels', Accounting and Management Information Systems, no. 20, pp. 98-111.
Broad, R & John, C 1999, 'The Corporate Accountability Movement: Lessons and
Opportunities', Fletcher Forum of World Affairs, vol 23, no. 2.
CPA 2012, Cpaaustralia, viewed 28 August 2012,
<http://www.cpaaustralia.com.au/cps/rde/xchg/cpa-site/hs.xsl/knowledge-practice-
toolkit-green-accounting.html>.
Dexter Dunphy et al 2000, Sustainability: The corporate challenge of the 21st
century, Allen & Unwin.
GRI , 2012, Global Reporting Initiatives, viewed 24 August 2012,
<https://www.globalreporting.org/Pages/default.aspx>.
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Hillary, R 2000, Iso 14001: Case Studies and Practical Experiences, Greenleaf
Publishing.
ICAA , 2012, Institute of Chartered Accountants of Australia, viewed 24 August
2012, <http://www.charteredaccountants.com.au/>.
ICAA , 2012, Sustainability, viewed 9 September 2012,
<http://www.charteredaccountants.com.au/Industry-Topics/Sustainability>.
Kausek, J 2007, Environmental Management Quick and Easy: Creating an Effective
ISO 14001 EMS in Half the Time, ASQ Quality Press.
Keil, I 2004, Environmental Management Accounting, GRIN Verlag.
Kuhre, WL 1998, ISO 14031--environmental performance evaluation (EPE):
practical tools and techniques for conducting an environmental performance
evaluation, 1st edn, Prentice Hall PTR.
Martin, B, Páll M., R & Stefan, S 2009, Environmental Management Accounting:
Purpose and Progress, Springer.
Moradzadeh, FM & Ahmadzadeh, H 2006, 'Corporate sustainability reporting',
Monthly periodical of the accountant, vol 177, pp. 17-25.
morhardt, JE 2009, corporate social responsibility and sustainability reporting on
theinternet, business strategy and the environment.
M, B & P, J 1997, Environment-related management accounting: current practice
and future trends, 17th edn, Greener Management International.
Nicholas P., C & Avrom, B-V 2001, Green Profits: The Manager's Handbook for Iso
14001 and Pollution Prevention, Butterworth-Heinemann.
Philip, K & Nancy, L, Corporate Social Responsibility: Doing the Most Good for
Your Company and Your Cause, John Wiley & Sons.
Plender, J 1998, Giving People a Stake in the Future. In: Long Range Planning.
Raimund, B & Peter, H 2004, Eco-Efficiency, Regulation, and Sustainable Business:
Towards a Governance Structure for Sustainable Development, Edward Elgar
Publishing.
R, B & K, G 1993, Accounting for the environment, Australian Accountant.
Thomas, IG 2005, Environmental Management Processes and Practices for Australia,
Federation Press.
Visy 2012, , viewed 14 September 2012, <http://www.visy.com.au/about/>.
Visy 2012, , viewed 14 September 2012, <http://www.visy.com.au/about/our-
company/>.
Visy 2012, , viewed 14 September 2012, <http://www.visy.com.au/about/community-
programs/>.
Visy 2012, , viewed 14 Septermber 2012, <http://www.visy.com.au/packaging/>.
Visy 2012, Insights & Innovation, viewed 14 September 2012,
<http://www.visy.com.au/about/insights-innovation/>.
Visy 2012, Recycling, viewed 14 September 2012,
<http://www.visy.com.au/recycling/>.
Visy 2012, Sustainability, viewed 14 September 2012,
<http://www.visy.com.au/sustainability/>.