ACC303 Theories In Accounting To Current Topical Issue in BHP Billiton Assessment 2 Answer
It is important for organisation to analyse about various issues faced by business at competitive marketplace in prompt manner. The chosen issue faced by enterprise is Corporate Social Responsibility. The organisation selected for given assignment is BHP Billiton which is mining and metal industry. Main aim of report is to discuss about different issues faced by organisation along with using of accounting theories, effectiveness, motive and impact of CSR disclosures. It is important to analyse about various aspects of issues and make effective planning to gain positive outcomes in given period of time.
The organisation running their activities and operations at marketplace has to face several social issues in terms of accounting and leads to impact different stakeholders in negative manner (Ahmadi, Kusi-Sarpong and Rezaei, 2017). The organisation selected for given assignment is BHP Billiton which is metals as well as mining industry founded in 1885 and serving worldwide. Main aim of report is to identify as well as apply theories and models in accounting for current issues related with business. The issue selected for given assignment is Corporate Social Responsibility (CSR) along with accounting theories, motive, effectiveness and their impact in terms of issues.
Issues of Corporate Social Responsibility (CSR)
It is defined as responsibility of company as well as business on communal, moral, economic and environmental issues (Arena, Bozzolan and Michelon, 2015). This has been seen that CSR helps in coordinating as well as integrating all activities of economic, social and human rights. CSR aids to reflect global as well as organise values, reaping advantages for creating as well as operating goodwill at society where it is operating. BHP Billiton has to implement CSR at enterprise in order to manage emission from green house gas, improving energy efficiency, creating fair atmosphere. For enhancement of company performance, it is essential for business to set particular targets. In this context, it has faced emission of green houses gases. Here, BHP Billiton has set to decrease 6% of emission of green gas in 2012 and aimed to enhance energy by 13%. In addition to this, respective organisation has spent money for growing technologies in order to create fuel for coal to gain sustainable proposal. It has also created as well as develops clean coal technologies in Australia and USA. For implementing CSR activities, BHP Billiton has generated electricity with zero greenhouse gas emissions. Also, respective organisation has taken serious steps in adopting sustainable business programs in prompt manner.
BHP Billiton has participated in different initiatives of external benchmarking for measuring development as well as growth as compared to other business dealing in same industry (Banke-Thomas and et. al., 2015). Such initiatives would lead manager for pointing out targets of investment on foundation of both environment and social policies and investigates enterprise for coordinating risk of HSEC in more effective and efficient manner. This helps in describing about issues of scanning management as well as environment issues.
The main issues that has faced by BHP Billiton is in terms of emission of green house gas. It is important to adopt various accounting theories for implementing CSR in order to resolve issues in effective manner for high results. The different adopted by respective organisation are as follows:
Cost Principle Theory- For solving issues, it is important for BHP Billiton to adopt cost principle theory (Delgado and Romero, 2016). They need to maintain cost record of emission gas formed by BHP at marketplace and make record in prompt manner for better results. Cost accounting records assets on books of accounting which is real property or equipment. Here, assets mean coal, mine whose recording should be made for better results in given period of time. Therefore, it is important for respective business to make proper recording with help of accounting so that arise issues and problems would be solved in given period of time.
Matching Principle of Accounting- This is defined as accounting theory which calculate about revenues as well as expenses (Font, Guix and Bonilla-Priego, 2016). It is essential for BHP Billiton to maintain revenues as well as expenses recording for their products that are provided by it in prompt manner. It is important for respective business to maintain principle of accounting so that issues regarding emission of green house gas are solved in prompt manner.
Therefore, these are the theories of accounting which should be applied by BHP Billiton for solving arise issues and accomplish desired goal and objectives for positive outcomes.
The first motive of CSR is economic, strategic or financial which is business case argument (Gualandris and et. al., 2015). Company has drive business case through adopting challenges of CSR for finding better opportunity as well as social responsibility and developing CSR initiatives to provide financial return. BHP Billiton has to make effective motive for CSR activities and operations to accomplish desired goal and objectives in given period of time. This is essential for enterprise to adopt all types of policies and plans for working in corporate world to accomplish desired goal and objectives in prompt manner.
The CSR activities are very important for BHP Billiton to solve arise issues of emission and green house gas (KOSTYUKOVA and et. al., 2017). With the following of CSR, it is possible for respective business to accomplish desired goal and objectives in given period of time. Reporting CSR activities lead stakeholders of enterprise for taking issues of diversity, environment, health and safety to respect all standards as well as impact business activities and operations. CSR helps in improving profits, sales, motivation and society as whole which makes work more effective and simple to gain high results in given period of time. Therefore, it is important to set benchmark against performance and seek best practices for CSR by taking part in awards of business or measurement tools like responsible business tracker.
Impact of CSR disclosure
CSR disclosure is defined as information which is used by company in order to disclose about impact of environment as well as relationship with stakeholders through using effective communication channels in prompt ways (Macharis and Bernardini, 2015). This helps to disclose information about firms which have done to sake community. It helps in contributing welfare of society as well as performs in future to provide interest and welfare of society. If there is high level of CST disclosure, then it leads to better future of financial performance. This leads to measure about corporate social performance as well as financial performance. Main impact of CSR disclosures is on economic, ethical, legal and philanthropic activities. This provides impact on economic where providing fair return to fair compensation, fair prices to users and many more. It is suitable for all types of enterprise to survive at marketplace. Ethics denotes about moral value and principles to conduct work in right and wrong manner or behaviours. Respective organisation has to behave in ethical manner for high performance. CSR impacts in legal manner where they should abide by law and rule of game to be liable and responsible for ethical manner. Last impact is in form of philanthropic where business ideas should be used to improve quality of life of local communities, society and employees.
For improvement, it is important to BHP Billiton to adopt different recommendations in prompt manner (Manetti and Bellucci, 2016). They are as follows:
- It is important for respective business to create strategy of sustainable transportation that would assist company to minimize emissions from green house gas in long terms.
- This is recommended to respective organisation to develop renewable energy for generation of electricity in prompt manner (Mitchell and et. al., 2015).
- The company is recommended to use instrument of economic for controlling emissions from green house gas. This has observed that economic instruments include fees of emissions that provide permission to enterprise for achieving cost of environment at low cost in prompt way.
- It is recommended to respective business to implement efficiency of energy measures in both commercial as well as industrial sector along with adopting process for minimizing emissions of reducing methane gas from different sites. In addition to this, they should focus on improving sinks of carbon dioxide such as forests.
- This is recommended to respective organisation to implement R&D for renewable energy to possess sufficient technology for positive outcomes.
- It is recommended to respective business for adopting changes that are taken place at market in terms of climate, technology and many more.
- It is also recommended to respective business, to involve employees as well as suppliers for making decision regarding with use of energy, voluntary labour, energy, renewable sources and many more.
- It is important for organisation to adopt positive environment where all employees should work with respect, trust, dignity and opening free atmosphere where each of them get equal opportunity to discuss their issues and problems with superior or manager for positive outcomes.
Therefore, it is important for BHP Billiton to adopt all CSR recommendation in order to run their activities and operations in prompt manner for high results and leads towards success and growth at competitive marketplace.