Accounting For Corporate Social Responsibility

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Question 1
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True/False

A specific UK requirement for companies to provide environmental information in their annual reports is available in IAS 37 Provisions,Contingent Liabilities and Contingent Assets.

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Question 2
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True/False

Social and environmental information are often ignored in financial reporting due to the difficulty of quantifying social and environmental costs.

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Question 3
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True/False

Disclosure of environmental information is consistent with the Positive Accounting Theory paradigm in that it seeks to reduce adverse wealth transfers.

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Question 4
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True/False

A sustainability report is an example of a stand-alone social report.

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Question 5
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The traditional view is that business entities are responsible for their financial performance and the impacts they have on stakeholders with whom they interact.

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Question 6
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The traditional accounting model focuses on property rights and market transactions and so tends to treat environmental goods such as air and water as being free and therefore not assets,expenses or revenues that need to be reported.

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Question 7
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'Greenwash' is a term applied to environmental reports that are considered to be for the purpose of public relations rather than a balanced report of environmental impacts.

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Question 8
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Freeman and Reed provide a broad definition of 'stakeholders' as follows:
'any identifiable group or individual who can affect the achievement of an organisation's objectives,or is affected by the achievement of an organisation's objectives'.

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Question 9
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Gray,Owen and Adams define accountability as 'the duty to provide an account or reckoning of those activities that have been undertaken by an entity in a specified period of time'.

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Question 10
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Companies are required to disclose information about payments to directors and executives and the average wage level for their major classes of employees by function within the organisation.

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Question 11
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It is common for 'clean-up' costs to be excluded from traditional financial reports of mining firms because this undertaking is purely voluntary.

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Question 12
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The mission of the Global Reporting Initiative is to make sustainability reporting standard practice by providing guidance and support to organisations.

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Question 13
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The 'social contract' (or community licence to operate)is considered to be an implied contract constituted by the expectations that society holds about the conduct of an organisation.

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Question 14
Multiple Choice

The body/bodies that have been proactive in providing environmental reporting guidelines/framework include:

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A
the International Accounting Standards Board.
B
the International Federation of Accountants.
C
Global Reporting Initiative body.
D
the International Oil and Gas Producers Board.
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Question 15
Multiple Choice

Factors that may influence perceptions of what the responsibility of an organisation should be include:

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A
an individual's cultural background.
B
the time period (generation) that the individual comes from.
C
the individual's role in the community.
D
all of the given answers.
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Question 16
Multiple Choice

Social-responsibility reporting may be defined as:

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A
the reporting of information relevant to key stakeholders identified by the entity as requiring non-performance information.
B
the provision of information about the performance of an organisation in relation to its interaction with its physical and social environment.
C
the reporting of events and impacts on the financial and economic wellbeing of the organisation that stakeholders will find useful for decision making.
D
the provision of financial information about the impacts of the entity on the environment and communities.
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Question 17
Multiple Choice

Triple-bottom-line reporting has been defined as providing information about:

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A
the financial, economic and environmental performance and position of an entity.
B
the profitability, sustainability and human relations performance of an entity.
C
the social value, economic impact and community support provided by an entity.
D
the economic, environmental and social performance of an entity.
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Question 18
Multiple Choice

Sustainable development has commonly been defined as:

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A
development that meets the needs of the present world without compromising the ability of future generations to meet their own needs.
B
development that has continued at a consistent rate of growth over a period greater than 5 years.
C
development that can be financially supported over the mid to long term.
D
development that makes the most effective use of the resources available while balancing the needs of shareholders and other stakeholders for appropriate returns on their investment in the organisation (whether that be in terms of money or time).
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Question 19
Multiple Choice

Milton Friedman expressed the view in his book,Capitalism and Freedom,that:

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A
Corporate managers have a moral responsibility to consider the impact of the entity on the environment and society, on the basis that society has an unwritten 'contract' with the entity under which society allows the entity to continue to exist if it offers appropriate benefits back to the community.
B
Corporate managers should provide transparent accountability to those who provide capital whether that is in financial, broader economic or social terms.
C
Corporate managers have a single responsibility and that is to use the resources of the entity and engage in activities designed to increase profits within the constraints of engaging in free and open competition without deception or fraud.
D
Corporate managers should pursue their own best interests since they will be contracted to the entity they manage in such a way that any agency costs of their self-interested behaviour are minimised and so they will generate the most efficient allocation of resources, profits and benefits for society.
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Question 20
Multiple Choice

According to Gray,Owen and Adams,accountability involves:

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A
the responsibility to provide an account of an entity's actions.
B
the expectation that entities will undertake responsibility for the financial and economic effects of their actions.
C
the responsibility to undertake certain actions (or to refrain from taking actions).
D
the responsibility to provide an account of an entity's actions and the responsibility to undertake certain actions (or to refrain from taking actions).
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