Chapter 9 - Sustainability reporting P2

Which of the following is not a reason why traditional financial accounting may be unable to reflect the social and environmental impact of organisations?

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'.

Which of the following is not a reason why traditional financial accounting may be unable to reflect the social and environmental impact of organisations?

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.

Which of the following is not a problem with the concept of the 'triple bottom line'?

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 the 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.

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

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

. 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

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.

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

A. Comparable

B. Relevant

C. Reliable

D. Understandable

The prevalence of social and environmental reporting is

A. Declining

B. Increasing

C. Stable

D. None of the given options are correct.

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 are correct.

Chapter 9 - Sustainability reporting P2

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