Profit seeking firms will not spend any dollar for non-value adding processing. (Smith, Thorne and Hilton, 2006) However, even with the lack of regulation, many organisations voluntary publicly release information about their social and environmental performance. (Deegan, 2009) According to Richard (1993) finding, investors intent to choose the company investing whether it demonstrates that is a market leadership or offer above average growth or bring in strong management. However, there are few companies in Europe that can fulfill those criteria at that time. I believe that it is relatively hard to be a market leader or keeping an offer above average return for the investors. Yet companies can demonstrate that they had a strong management by providing not only accounting information report, but also their social and environmental impacts and performances report. This essay is going to discuss the development of triple bottom line reporting and how this will impact of financial reporting and the conceptual framework.
Elkington (1997) defined that triple bottom line reporting is a reporting that provides information about the economic, environmental and social performance of an entity and joined to the concept and objective of sustainable development. According to Brundtland (1987), the report on World Commission on Environment and Development, sustainable report is development that meets the needs of the present world without compromising the ability of future generation to meet their own needs. In other words, companies provide a triple bottom line or sustainable report are illustrate that they are balancing the benefit for current profitability and future generation needs.
Under the contingency perspective, company must be...
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Due to the use of the company’s annual report for users to make decisions, ensuring that the financial reports convince the objective of general purpose financial reporting and qualitative characteristics of useful financial information as outlined in the IASB September 2010 ‘Conceptual Framework for Financial Reporting’ (CF) have become extremely important. Such failure of disclosures can mislead information on the company’s financial statements.
Stakeholders and investors are no longer only interested in financial performances, they are interested in the governance of the company like what business practices and business models are implemented, social performances, how the company is giving back to society, how costumers are handled, environment and how diversity at work placed is addressed. Hence relevant information must be provided to the stakeholders to assure them that the company has a sustainable business model (Ridehalgh, 2012).
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Schofield (2014) researches the difference between public and private company financial reporting. For instance, a private company has fewer consumers reviewing their financial statements, whereas public companies could have multiple consumers reviewing financial statements. In addition, private companies typically have less specialized accounting personnel, whereas public companies will have several. Lastly, Schofield (2014), reviewed the number of amendments proposed and finalized to help benefit private companies financial reporting.
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Triple bottom line is defined as “a corporation’s ultimate success or health can and should be measured not just by the traditional financial bottom line, but also by its social/ethical and environmental performance” (Norman and MacDonald, 2003). There are many advantages when it comes to being a triple bottom line corporation. While incorporating the triple bottom line, you are also incorporating sustainability you’re your business. Therefore, becoming a triple bottom line corporation means it is one step higher towards helping save the planet. Becoming sustainable is cost efficient. Although it may cost a significant amount of money to convert, it will pay itself off in the long run. Additionally, it will help reduce expenses while saving
The individual effort for accomplishment of sustainability is impossible with out the support of companies. Company’s operates not only for today but it aim to success in future. Whereas, BHP Billiton is a multinational mining (i.e. metals, petroleum, coal, aluminium, manganese) company who believes environmental and social performance is vital for the business. It businesses in 17 countries, is headquartered in Melbourne, Australia and has been titled as the largest mining industry worldwide proven by 2013 revenues. Being an enormous business it has even massive corporate responsibility, toward the planet as a whole. Sustainability reporting is now compulsory social report for companies to issue explaining about the economic, environmental and social impact of the organisations activity and BHP Billiton has proven to raise awareness in corporate transparency issues and increase accountability for the responsiveness towards stakeholders. Environmental cost being difficult to locate the company has been cooperating its responsibility towards society and environment by publishing sustainability report, Annual Health, Safety, Environment and Community Reports since over a decade. (Our Company,BHP Billiton, 2014).
The corporate report which was published by the Accounting Standards (Steering) Commit-tee(ASSC) in 1975 recommended the publication of VA statement in Europe and since then has received prominent international acceptance. For instance, before the advent of IFRS in Nigeria, it was a mandatory requirement for public companies to provide VA information in their financial statement. In South Africa, greater numbers of companies in the industrial sector of the Johannesburg Stock Exchange (JSE) still voluntarily include VA information in their financial statement (Malgwi, & Purdy, 2009). In 2005, about 77% of companies listed on the JDE produced value added statement or consolidated value added statement (Stainbank, 2009, p. 138). The advent of the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines has considerably stimulated and encouraged value added information
The idea of companies existing in order to make money for their investors is widely accepted as the core business concept. In recent years, the involvement of corporate social responsibility (CSR) in the business model can be clearly observed. CSR can be described as the undertaking of initiatives which benefit other members of society. However, there is a great ambivalence and uncertainty about what CSR really means as well as what drives corporate units to pursue it. This part will describe the notion of CSR and present the debate between narrow and broad view of corporate social responsibility, the link between CSR and the Triple Bottom Line (TBL) and examine the shift in paradigms from altruistic standpoint to the strategic standpoint on CSR
Despite the fact that it has been proposed that assimilated financial records contained ecological and social data, it was evident in the article that the genuine mix merits consideration among the stakeholders. Sustainability segments in yearly reports among numerous cases were isolated, albeit incorporated; similarly, applies to corporate administration segments in connection to sustainability. At the same time, when the corporate administration and sustainability turn out to be truly connected and reported together, these offered new doors for integrative methodologies in expansion to the bookkeeping
Now-a-days it is considered that CSR is one of the major concerns of organization’s business ethics. Companies increasingly increase their corporate social responsibility (CSR) and ethical management accepting the positive impact on the bottom line. The vast bulk of Standard & Poor’s 500 companies publish sustainability reports unfolding their program challenges and achievements. These pre-emptive efforts can pr...