Corporate Social Responsibility And Reporting Essay; Statement Of Comprehensive Income And Statement Of Financial Position.

1.Company boards, executives, and management are investing more and more time and resources on issues of sustainability - such as carbon (greenhouse gas emissions), energy efficient technology, water use, cleantech, and biodiversity, to name just a few. An important part of the global push towards sustainability practices involves a need to account for, and report on, sustainability - sometimes referred to as environmental, social, and governance (ESG) reporting

“Corporate social responsibility (CSR) is an issue of growing interest, and the reporting of socially responsible activity is becoming more prevalent as investors, customers, and other stakeholders demand greater transparency about all aspects of business. As the importance placed by stakeholders on socially responsible behavior has increased, the attitude toward CSR has changed dramatically over the last few decades” (Kim, Park and Weir, 2012, p. 761).

Required:

• Critically discuss the above statement.
• Identify a company which is listed on the ASX, collect recently published annual report from the company webpage and discuss what types of social responsibility information the company provides in the annual report? Do you think that your chosen company’s CSR disclosures are adequate for the stakeholders of the company? (Please note that each group needs to select different company after consultation with the tutor)

2.Merinda Ltd commences its operations on 1 July 2017. One year after the commencement of its operations (30 June 2018) the entity presents its first Statement of Comprehensive Income and Statement of Financial Position on 30 June 2018. The statements are prepared before considering taxation. The following information is available.

Merinda Ltd

Statement of Comprehensive Income

for the year ended 30 June 2018

Merinda Ltd

Assets and Liabilities as disclosed in the Statement of Financial Position

for the year ended 30 June 2018

Other information:

• All administration and salaries expenses incurred have been paid as at year-end.
• The amount of $163,800 long service leave expense has been paid.
• The machinery is depreciated over 10 years for accounting purposes, but over 8 years for taxation purposes.
• Amounts received from sales, including those on credit terms, are taxed at the time of the sale is made.
• Warranty expenses were accrued and, at the year-end, actual payments of $50,400 had been made (leaving of accrued balance of $100,800). Deductions for tax purposes are only available when the amounts are paid and not as they accrued.
• Insurance was initially prepaid to the amount of $190,500. At the year-end, the unused component of the prepaid insurance amounted to $51,900. Actual amounts paid are allowed as a tax deduction.
• Merinda Ltd has some land which cost $1,470,000 and which has been revalued to its fair value of $2,268,000.
• The tax rate is 30 per cent.

Required:

• Compute the taxable income or loss.
• Complete the Taxation Worksheet on the next page in accordance with AASB 112 Income Taxes.
• Prepare the applicable journal entries at 30 June 2018 to account for tax using the Balance Sheet method

Nowadays, corporate social responsibility or CSR is an unparallel and one of the most important concept which the managements of the company has to follow in order to fulfil the requirements stated in the standard of financial reporting of the company. In the CSR reporting, the companies state their concern about the social and environmental concerns about the integration in their business. This concern is regarding the operations and interactions between the management of the company and the stakeholders of the company. By recognising the economical, social and environmental imperatives data in accordance with the triple bottom line approach the company state the expectations that the stakeholders expect from the financial activities of the company (Bhasin 2015).

It is very important for the company to recognise the CSR of it by the management in order to draw the distinction in order to state the concept of the strategic business management of the company. In other words, the overall strategy of the company regarding the management concept, charity, philanthropy and sponsorships are being stated in this recognition (Suzuki 2015). This recognition also includes the contributions of the company regarding the poverty reduction and the works of the company in order to increase reputation of the company. This also helps the company to strengthen the brand value of the company. Thus, it can be stated that the overall concept of the CSR is far comprehensive than its literary meaning.

On the other hand, the procedure of promoting the brand value of the company needs to approach the methods and operations of the company in accordance with its financial activities. The CSR operations and recognition should not affect the major economic viability of the company. The tools used for CSR programme is UNIDO based and it is a very useful tool for the companies in the developing countries in order to help the country men to meet their social and economical needs (Fisher and Krumwiede 2015). The triple bottom line approach is the framework for recognising, reporting and measuring the corporate social responsibility of the company. Under this framework, it is stated that the policies that are being taken by the companies as compensation against the social, economical and environmental position within the operating areas of the company should be recognised in the annual report of the company (Ramanna 2014).

There are certain key issues which are needs to the recognised in the annual report of the company in order to state the CSR of the company. These issues are, the economical efficiency, standards of labour and training of the employees, working conditions provided by the company, rights provided to the employees and worker. The issues also includes the balance in gender equality, the relation between the management and the community, the engagement with the stakeholders, the taken steps against the anti corruption, and the quality of the governance of the company (Agrawal and Cooper 2017). These recognitions made by the management of the company makes it possible to gain the competitive advantage, increase the access to the markets and the capital and the efficiency of the employees, improve the quality and the production level, increase the goodwill of the company and the consumer base, and helps to manage the probable risks and the decision making procedures of the company.

Recognition of CSR in Annual Report

For the next segment, the corporate social responsibility of Commonwealth Bank Australia has been stated. In the business sustainability segment of the annual report of the company, all the CSR strategy provided by the bank in order to deliver the preferable outcomes to its stakeholders has been stated (Roy and Saha 2018). The materiality assessment which are being undertaken in order to evaluate the strategy, initiatives and the supports provided by the bank in accordance with the considerations of the stakeholders have been evaluated with a purpose of recognising the global megatrends, operating environments and issues like business ethics, changes in climates, transitioned  workforce and the technological disruptors.

The company has recognised certain issues regarding to its shareholders. In accordance with this identification, the company has stated certain key areas which are needed to be focused. These areas are the responsibility of the company regarding the responsibility of service, responsibility of the company in order to maintain and increase the trust and reputations of the company, make the workforce of the company accountable and diverse and to gain the long-term sustainability of the company (Maas et al. 2016). Apart from that, the company has also taken certain key engagement plans for the stakeholders of the company. These engagement policies included the customers, employees, shareholders, governmental regulations, suppliers, media, community and the service providers of the company. The company has also stated certain recognitions and frameworks which have been included in order to evaluate the CSR of the company.

In the CSR recognition segment of the company, the management has stated four major policies which are being addressed to various stakeholders of the companies. These stakeholders are the customers, the community members, the employees and the shareholders. For the customers of the company, it stressed upon certain points in order to improve the quality of service, supports regarding the financial wellbeing of the customers and the advocacy, expected outcomes and digital innovation (Watson 2015). In regards to the strategies taken for the community, the company offers the policies which will be fruitful for increasing the reputation and trust. These policies contain the fulfilment of the regulations stated by the government, investment made by the company for communal health and education and the reconciliations to establish the company as a role model. The company also provides certain facilities to its employees in order to improve their health, wellbeing, career and skill development. The company have also taken certain policies in order to provide sustainable financial performance to its shareholders in regards of management, governance, remuneration, accountability and ethical practices of the financial operations (Saeidi et al. 2015).

Conclusion

From the given assessment, it has been shown how the selected company Commonwealth Bank Australia has managed to recognise all the requirements that are needed in order to recognise the CSR policies taken by the company. The policies that are being taken by the company for the customers, community members, employees and the shareholders are being analysed and evaluated and it can be stated that the recognitions made by the company have been able to fulfil the required framework of recognising the CSR strategies.

References

Agrawal, A. and Cooper, T., 2017. Corporate governance consequences of accounting scandals: Evidence from top management, CFO and auditor turnover. Quarterly Journal of Finance, 7(01), p.1650014.

Bhasin, M.L., 2015. Corporate accounting fraud: A case study of Satyam Computers Limited.

Fisher, J.G. and Krumwiede, K., 2015. Product costing systems: finding the right approach. Journal of Corporate Accounting & Finance, 26(4), pp.13-21.

Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment, management accounting, control, and reporting. Journal of Cleaner Production, 136, pp.237-248.

Ramanna, K., 2014. Political standards: Accounting for legitimacy.

Roy, M.N. and Saha, S.S., 2018. Perceptions of Respondents on Statutory Auditors’ Independence in Corporate Accounting Scandals: An Empirical Analysis. In Statutory Auditors’ Independence in Protecting Stakeholders’ Interest (pp. 173-285). Palgrave Macmillan, Cham.

Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of business research, 68(2), pp.341-350.

Suzuki, T., 2015. National Accounting, Corporate Accounting, and Global Standardization. Wiley Encyclopedia of Management, pp.1-5.

Watson, L., 2015. Corporate social responsibility research in accounting. Journal of Accounting Literature, 34, pp.1-16