Deck 14: Trends and Issues in Accounting

Question 1

Which statement concerning Integrated Reporting (IR) is not true?

A) IR enables an organisation to communicate its value creation over time.
B) An integrated report is a detailed and long written report provided for the benefit of shareholders.
C) An integrated report is built around an organisation's strategy.
D) IR provides information over the short, medium and long term.

Answer 1

B

Question 2

In New Zealand, the accounting standard on corporate social responsibility is:

A) NZ IAS 1.
B) NZ IAS 36.
C) NZ IAS 17.
D) There is no New Zealand standard on corporate social responsibility.

Answer 2

D

Question 3

Using the Boston Consulting Group (BCG) portfolio matrix:

A) businesses with low market growth and a low competitive position are designated as dogs.
B) businesses with low market growth and a low competitive position are designated as cows.
C) businesses with low market growth and a low competitive position are designated as question marks.
D) none of the above

Answer 3

A

Question 4

All of the following are essential principles of corporate governance identified by the Securities Commission except:

A) recognising and managing risk.
B) structuring the board of directors to make it as effective as possible.
C) actively promoting ethical and responsible decision-making.
D) providing jail sentences for breaches of corporate governance rules.

Question 5

In 2014 in New Zealand, voluntary disclosures in annual reports relating to social responsibility accounting can be described as:

A) rare.
B) occasional.
C) becoming more common.
D) universal.

Question 6

The Boston Consulting Group (BCG) portfolio matrix rates sections of the organisation, based on market growth rate and competitive position, into which of the following categories?

A) stars, uncertain, cash cows, dogs
B) stars, pigs, dogs, bears
C) growth, maturity, decline, stable
D) young, middle-aged, old, unknown

Question 7

Which statement concerning the balanced scorecard is not true?

A) The Global Reporting Initiative and the balanced scorecard have much in common.
B) It tends to change the emphasis from production to customers.
C) The GBI approach is likely to shrink the role of the management accountant and expand the role of the financial accountant.
D) None of the above, i.e. all are true statements.

Question 8

These statements are all correct except:

A) It is no longer sufficient for business to be focused solely on the maximisation of wealth.
B) All businesses currently accept that sustainability is the primary goal.
C) There is increasing pressure for management to address a much broader range of issues than in the past.
D) Social and environmental concerns now have to be taken seriously by business.

Question 9

'How companies manage the business process to produce an overall positive impact on society', is a definition of:

A) corporate social responsibility.
B) ethics.
C) environmental responsibility.
D) none of the above.

Question 10

In evaluating the business perspective under the balanced scorecard approach, possible measures that could be employed are:

A) percentage of systems automated.
B) percentage of production completed which meets the set standards.
C) production days lost.
D) all of the above.

Question 11

The most common area of voluntary social responsibility reporting in New Zealand is:

A) philanthropy.
B) nuclear waste.
C) human resources (health and safety, working conditions, etc).
D) none of the above.

Question 12

Which of these is a way in which sustainable reports should be similar to current financial reports?

A) reliance on monetary measures
B) degree of auditability of reports
C) scope of report
D) comparability

Question 13

Reasons why a business might engage in activities that are less profitable to itself but which are beneficial to society are:

A) because of expectations of future legislation.
B) to market itself as a good citizen.
C) to improve liquidity.
D) A and B

Question 14

Which of these is a standard disclosure for sustainability reporting recommended by the Global Reporting Initiative?

A) disclosure of the management approach used
B) disclosure of performance indicators
C) disclosure of strategy
D) all of the above

Question 15

Which statement concerning the balanced scorecard is incorrect?

A) Financial information remains a core component of decision-making and strategy development.
B) Reliance solely on financial data will provide an incomplete or unbalanced approach.
C) Its essence is to develop qualitative rather than quantitative measurement tools.
D) None of the above, i.e. all are correct.

Question 16

The main work carried out by Ceres in recent years relates to:

A) climate change.
B) reduction and disposal of wastes.
C) corporate environmental reporting.
D) all of the above.

Question 17

The essence of triple bottom line reporting is:

A) wealth creation.
B) sustainable development.
C) pollution control.
D) social responsibility.

Question 18

The sustainability reporting framework that is the most widely accepted standard for corporate sustainability reporting around the world is:

A) the ASX Corporate Governance Principles.
B) the Global Reporting Initiative (GRI).
C) the balanced scorecard.
D) none of the above.

Question 19

Which of these is regarded as a benefit of triple bottom line reporting for companies practising it?

A) encouragement of a value-driven culture
B) attracting better staff
C) better management of risk
D) all of the above

Question 20

Which of these is a way to encourage more socially responsible behaviour by companies?

A) make breaches of behaviour more costly
B) government action such as legislation
C) market the 'good citizen' concept
D) all of the above

Question 21

The principle of 'stewardship' means that the main focus of accounting is on providing information to:

A) employees.
B) creditors.
C) shareholders.
D) none of the above.

Question 22

The 2002 Sustainability Reporting Guidelines issued by the Global Reporting Initiative identify which of these trends?

A) expanding globalisation
B) rising visibility of, and expectations for, organisations
C) search for new forms of global governance
D) all of the above

Question 23

Which of these groups is recognised by stakeholder theory as having a legitimate interest in the business?

A) government
B) customers
C) shareholders
D) all of the above

Question 24

Which statement about the effect of the Global Reporting Initiative and strategic decision-making is not true?

A) SWOT analysis is an approach that can be applied to strategic-decision making.
B) The GRI broadens management perspectives.
C) Management must consider questions such as how the perception of the company can be improved or damaged in the longer term.
D) Strategic decision-making is less difficult than short-term decision-making as more options become available when looking to the longer term.

Question 25

In recent world studies on voluntary social responsibility reporting, it has been found that:

A) disclosure was greatest in New Zealand.
B) reporting was done principally by the largest companies.
C) reporting was mainly of a quantitative nature.
D) companies tended to provide 'bad news' as well as 'good news'.

Question 26

SWOT analysis stands for:

A) Strengths, Weaknesses, Opportunities and Threats.
B) Strategy, Weak points, Opportunities and Technology.
C) Situation, Work, Objectives and Training.
D) none of the above.

Question 27

The balanced scorecard approach was developed by:

A) KPMG.
B) Kaplan and Norton.
C) John Elkington.
D) R Grey.

Question 28

Which of these is an argument against corporate social responsibility?

A) Business is about building wealth for its shareholders not helping society.
B) It is too costly.
C) It is too difficult.
D) All of the above.

Question 29

In New Zealand, which of the following have been reactions to high-profile company failures such as that of Feltex?

A) greater disclosure requirements for companies
B) Corporate Governance Council set up by the New Zealand Securities Commission
C) Royal Commission
D) all of the above

Question 30

The perspective in the balanced scorecard approach that is concerned with how the business is running internally is the:

A) financial perspective.
B) customer perspective.
C) learning and growth perspective.
D) business perspective.

Question 31

The collective term for any individual or group with an interest in the activities of an entity is a:

A) stakeholder.
B) creditor.
C) shareholder.
D) manager.

Question 32

Which of these is not a broad guideline that it would be desirable for triple bottom line reporting to follow?

A) have external verification
B) be balanced, including negatives as well as positives
C) be independent of other financial reports
D) None of the above, i.e. all are broad guidelines.

Question 33

The statement concerning triple bottom line reporting that is not correct is:

A) The phrase was coined by John Elkington.
B) It means that the need for goods and services should be met without destroying natural or social capital.
C) Companies tend to report favourable news rather than unfavourable news.
D) It only deals with things that can be measured.

Question 34

Which of these is not claimed as an advantage of the balanced scorecard approach?

A) Decisions will be based on fact.
B) More staff will have a better understanding of the big picture.
C) Overhead costs will become a smaller percentage of total costs.
D) Continual feedback and review will occur.

Question 35

A 2011 KPMG survey on triple bottom line reporting found what percentage of the world's top 250 companies produced a separate corporate report with details of social and environmental performance?

A) 64%
B) 10%
C) 80%
D) 28%

Question 36

The total impact of business actions on society at large is known as:

A) economic impact.
B) corporate governance.
C) risk.
D) social responsibility.

Question 37

Research has found that in Australia, environmental disclosures in annual reports tend to be:

A) about half positive and half negative.
B) mostly positive in nature.
C) all positive.
D) mostly negative in nature.

Question 38

An independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines is:

A) the World Bank.
B) the Global Reporting Initiative (GRI).
C) the Group of Eight.
D) the United Nations.

Question 39

Meeting society's need for goods and services without destroying natural or social capital is known as:

A) sustainable value creation.
B) ethical living.
C) greening.
D) none of the above.

Question 40

The system by which corporations are directed and controlled is known as:

A) constitution.
B) board of directors.
C) corporate governance.
D) social responsibility.

Question 41

Triple bottom line reporting refers to reporting in the three areas of:

A) economic prosperity, environmental quality, social justice.
B) pollution, climate, recycling.
C) physical resources, energy, human resources.
D) none of the above.

Question 42

Which of these is not one of the perspectives from which the balanced scorecard views the business?

A) business process
B) financial
C) customer
D) product

Question 43

A study by Deegan and Gordon in 1996 reviewing the accounts of 197 Australian companies found which of the following types of environmental disclosures?

A) compliance with government standards
B) use of environmentally safe products in manufacturing
C) recycling of materials
D) all of the above

Question 44

A 2011 KPMG survey on triple bottom line reporting found which country to have the largest proportion of major companies that produced a separate corporate report with details of social and environmental performance?

A) UK
B) Japan
C) USA
D) Australia

Question 45

Which of these is an example of an environmental disclosure in an annual report?

A) sponsoring environmental achievement awards
B) implementation of tree planting schemes
C) introduction of environmental audits
D) all are examples

Question 46

The form of the report recommended by the Global Reporting Initiative includes:

A) a vision and strategy statement.
B) an organisation profile.
C) a description of governance structure and management systems.
D) all of the above.

Question 47

To maximise the effectiveness of corporate governance, an audit committee should be structured so that it:

A) is chaired by the chair of the board.
B) consists of a majority of independent directors.
C) consists mainly of executive directors.
D) all of the above

Question 48

Based on Smith 1997, which is the correct order for these steps in the framework for strategic management accounting? i) Benchmarking
Ii) Objectives
Iii) Accounting system implications
Iv) Evaluation of achievement
V) Strategy alternatives
Vi) Situation analysis

A) i, ii, iii, iv, v, vi
B) ii, v, i, iv, iii, vi
C) ii, vi, i, v, iv, iii
D) none of the above

Question 49

Aspects of corporate social responsibility are:

A) impact on employment and job creation.
B) pollution.
C) health and safety.
D) all of the above.

Question 50

Integrated Reporting (IR) focuses on connectivity of information around the following capitals:

A) financial, manufactured, intellectual, human, social and relationship, environmental.
B) financial, manufactured, intellectual, human, environmental.
C) intellectual, human, social and relationship, natural, financial.
D) financial, manufactured, intellectual, human, social and relationship, natural.