sample of BAO3309 ADVANCED FINANCIAL ACCOUNTING (3)

this time is an older one,

requirements:
General Information

As detailed in the subject/unit Guide, the assignment, which may be completed in a group of maximum 3 students, constitute 20% of the total assessment in this unit.
Please answer the following question:

1. Using examples from social and environmental reporting (SER) research literature, explain the potential motivational factors behind such reporting?

Select one company from each of the following industry sectors:

a) Mining

b) Retail

c) Pharmaceutical

This means that you will be reviewing three companies in total. For each of these companies, you will need to investigate the company website, annual reports; publicly available special reports; media and other sources of information.

For each of the above companies prepare a report answering the following questions:

2. What are the factor(s) that you consider motivates SER in each of these companies?

3. Analyse and report on the disclosures made by each company?

4. Do the actual company practices contradict with their social and environmental policies? In what ways? Describe.

5. Does the particular SER meet the best practice recommendations of ASX? Explain how.

Introduction


Along with the strong competition in the business world, companies are focusing on the social and environment reporting, which will provide a comprehensive view of the organization and its resources, and indicate the company’s attitude for community and environment. However, there are many questions about the motivation of companies doing such reporting. In the essay, these questions will be answered in five parts. First, an analysis of the potential motivational factors behind such reporting will be conducted. Next, a discussion of motivates SER will be analyzed by selecting three companies in Mining, Retailing, and Pharmaceutical industry, they are, David Jones Limited. Then, the disclosure made by each company will be analyzed and reported. After that, a comparison between practice of each companies and their social and environment policies will be conducted. Lastly, the SER will be compare with the best practice recommendations of ASX.

Question 1

Another motivation of doing social and environmental reporting is to increase the wealth of managers and shareholders of the organization. The positive accounting theory assume that people are driven by self-interest, so if such a social and environmental reporting will maximum the wealth of the management or the company, the managers and shareholders are willing to disclosure the social and environmental report. In other words, a well disclosed social and environmental report will protect the interests of stakeholders, maximize the interest of the company, and establish the competitive advantage and good reputation for the company, as a result, if the concept of people are driven by self- interest is accepted, doing social and environmental report is to maximize the wealth of the managers and shareholders of the organization.

Question 2

Motivation of SER in David Jones

David Jones is not the only oldest department store in Australia, but the oldest department store trading under its original name. David Jones was floated on Australia Stock Exchange in November 1995, so David Jones as a listing company; it should be complied with the ASX listing rules and corporate governance guidelines. Recently, many companies recognize the importance of the social and environmental reporting which will grow trust for companies and lead growth to the company, so David Jones also doing such a reporting, but the social and environmental reporting is in the corporate governance statement. As a result, the motivation of David Jones as a retailer will be analyzed in detail.

1) To prove the organization is acting comply with the law, and to meet mandatory requirements

2) To satisfy and needs of stakeholders, and manage powerful shareholders by doing the social and environmental reporting to maximum the wealth of the organization.

3) To fulfill the social responsibilities, and build a good reputation for the company.

4) To establish the benchmark of current position of the company, future goals and targets, and strategies for the company to reach the goals.

5) To build trust, and increase wealth of the company.

Question 3

Analyze and report the disclosure on social and environmental reporting of David Jones

Environment

David Jones has recognized the importance of the environment it operates, so David Jones is trying to protect the environment the business they involved. It takes several actions to protect the environment, such as establishing benchmark for the supplier or producer to use recycle material in production, monitoring the energy they used, encouraging the management to use recyclable products, reducing number of plastic bags, and minimizing the packing volume generated by retail business. All the actions indicate that David Jones take environment protection in consideration, and it trying to protect environment. By doing these actions, David Jones also get benefits, for example, the recycle material is required in order to produce less waste, so the company will not punish by the government, monitoring energy and reducing the packing volume generated by retail business will lower cost for the company. As a result, doing environment reporting is beneficial for the company and stakeholders.

Social

David Jones also takes social commitment in consideration, and it participates in many programs which contribute a lot for the community, these activities will help David Jones aligning the interest of customers with those of the shareholders. David Jones conducted a research in 2003, and it found that the most effective donation is in the area of children’s and women’s health. As a result, David Jones has made a lot of donations to National Breast Cancer Foundation, Children’s Cancer Institute of Australia, Rose Clinic, Sydney Cancer Centre, Children’s Hospital Burns Units, Starlight Foundation, Sydney Children’s Hospital, and Look Good...Feel Better(Corporate Governance Statement, 2005, pp24). All the donations help David Jones to build a good figure for David Jones, it will encourage people to shopping in David Jones, the people who buying the products in David Jones seems to offer funds to the women’s and children’s health, as a result, when the sales are increased, the profit is generated, and the wealth of stakeholder is growth.

Question 4

The policy of responsibility to community of David Jones is that “it aims to be socially responsible in all business it conducted to protect the health, wellbeing and lifestyle of the communities. Also, it is doing the business in ways which minimize the negative impacts on environment. In addition, as employees of David Jones we each have a role to play in this by ensuring our actions are consistent with the Company’s community commitment. David Jones has a charitable donations policy, established to give something back to the communities which have supported the David Jones business”. (Code of Ethics and Conduct, 2004, pp5)

However, The Australia Institute release a media with a title "Corporate paedophilia -- sexualising children by advertising and marketing.” pointed out that David Jones’ advertisement had adverse impact on children, because “children are increasingly being portrayed in clothing and posed in ways designed to draw attention to adult sexual features that they do not yet possess. ... Children are being eroticised in the interests of the corporate bottom line.” (Bob Burton, 2007).

As a result, the event shows that David Jones may not comply with its policy in responsibility to community.

Question 5

The SER reported by the David Jones is complied with the best practice recommendations of ASX. The ASX Principle 3 requires promoting ethical and responsible decision-making, which means companies need to have regard to their legal obligations and the interests of a range of stakeholders including shareholders, employees, business partners, creditors, consumers, the environment and the broader community in which they operate. Also, the ASX Suggestions for the content of a code of conduct number 4 indicates that company should describe the company’s responsibilities to the community. This might include environmental protection policies, support for community activities, and donation or sponsorship policies. In David Jones corporate Governance Statement 2005, it describe the environmental protection policies, which are monitoring energy they used, reducing packing volume in retail, encouraging recycle material in production. In the statement, David Jones also disclosed their supports to the community by making donations to children’s and women’s health, and other program.

Reference

David Jones Limited Corporate Governance Statement 2005

David Jones Limited code of Ethics and Conduct 2004

www.davidjones.com.au

KPMG Sustainability Advisory Services (2002), State of Sustainability Reporting in the Trade and Retail Sector

Bob B. (2007), The Corporate Art of Creating a Crisis

http://www.prwatch.org/node/5858

Adele H. (2007), Sex, lies and advertising: DJs sues over child exploitation claims

http://www.smh.com.au/news/national/sex-lies-and-advertising-djs-sues-over-child-exploitation-claims/2007/02/04/1170523959855.html