Question 1

What are appraisal costs? How are they different to prevention costs?

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Question 2

What external costs might BHP Billiton,a large Australian mining company,be concerned about?

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Question 3

'Management accounting cannot contribute to our understanding of sustainability issues in organisations.' To what extent do you agree or disagree with this statement?

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Question 4

Which of the following expenses is most likely to be an external failure cost?

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A regulatory fine is a cost incurred as a result of non-compliance with external rules and regulations, which is a characteristic of external failure costs. The other options listed are not necessarily external failure costs - salary expense could be an internal or external cost, quality control expenses are generally considered a prevention cost, and GHG monitoring expenses could be considered an internal or external cost.

Question 5

Why can't accounting systems capture external costs at present?

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Question 6

Identify two sustainability related KPIs and explain how they raise an organisation's understanding of its sustainability performance?

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Question 7

Explain how external costs might impact the management of Nike Inc. ,the world famous clothing brand,and how accounting systems might help better understand these challenges.

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Question 8

What are prevention environmental costs? Please explain with an example.

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Question 9

What are internal failure costs? How do they impact the organisation in the short and long term?

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Question 10

The James Hardie Corporation has been supplying building materials since the early to mid 20th century.Its earlier products used asbestos,a material we now know to be toxic and dangerous to those that come into contact with it.As a consequence of the ill health suffered by its employees,James Hardie incurred significant environmental costs,which it continues to be held accountable for even today.It is doing its best to minimise these adverse costs,but they often nevertheless must be incurred.
Please identify any possible prevention,appraisal,internal failure and external failure costs that might have to be considered by James Hardie.

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Question 11

Explain the main factors that might be considered by the Harvey Norman organisation (a large electronics retailer),if they were to implement a triple bottom line report:

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Question 12

Consider the operations of a cigarette manufacturer such as Benson and Hedges - what types of external costs might they have to consider?

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Question 13

Identify three value creation levers and discuss how sustainability initiatives might aid their attainment.

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Question 14

Why is triple bottom line reporting more comprehensive in its measurement of performance than traditional financial reporting?

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Question 15

How might the distribution,sales/marketing,re-use and recycling stages of a value chain be considered from a sustainability perspective? Please use Woolworths (a large Australian grocery chain)to illustrate examples.

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Question 16

How might the Epstein and Roy framework aid in the justification of sustainability investments?

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Question 17

How might the R&D,sourcing and production stages of a value chain be considered from a sustainability perspective? Please use Coca-Cola Amatil (CCA)to illustrate examples.

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Question 18

Consider the following five environmental costs and identify them as any one of the four environmental costs:
a.
R&D to develop lower GHG emission processes
b.
Fines for toxic spills into an adjoining river
c.
Injuries suffered by staff in the course of organisational operations
d.
Fatality in the workplace
e.
Thermometer installation costs to monitor the temperature in a factory,to ensure staff health

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Question 19

What are external failure costs? Please provide two examples of types of external failure costs.

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Question 20

Three companies in the same industry incur $100 000 in environmental costs - consider these costs below - identify the company that you think is the best,and the worst performer from a sustainability perspective,and please provide explanations for your selection.
$\begin{array}{llllll}
&\text { Prevention }&\text { Appraisal}&\text {  Internal }&\text { External failure}&\text {  Total costs }\
&&&\text { failure }\
\text { Company A } & \$ 10 ? 000 & \$ 20 ? 000 & \$ 30 ? 000 & \$ 40 ? 000 & \$ 100 ? 000 \
\text { Company B } & \$ 25 ? 000 & \$ 25 ? 000 & \$ 25 ? 000 & \$ 257000 & \$ 100 ? 000 \
\text { Company C } & \$ 40 ? 000 & \$ 30 ? 000 & \$ 20 ? 000 & \$ 10 ? 000 & \$ 100 ? 000
\end{array}$

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Quiz 15: Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting