Accounting vs Finance Degree:

ACCOUNTING AND FINANCE

Contents
Part-A.........................................................................................................................................3
Introduction................................................................................................................................3
Overview of social and environmental impacts.........................................................................3
Comparison of quality of social and environmental performance data availed with its
competitor..................................................................................................................................4
Discussion of challenges as being faced by BHP Billiton while complying with GRI reporting
standards.....................................................................................................................................7
Widespread compliances with GRI reporting standards with Fortescue Metal Group
benefiting potential investors, and other stakeholders of the organisation................................8
Conclusion..................................................................................................................................9
Part-B.......................................................................................................................................10

Part-A
Introduction
The report has the discussion on corporate governance of the BHP Billiton limited
headquartered in Australia. GRI (Global reporting initiative) is international standard, which
help government, and business to understand and communicate the impact of issues such as
human rights, corruption, and climate change. BHP Billiton limited serves several products
such as natural gas, coal, petroleum, and uranium. For comparison, here is the analysis of
GRI reporting of Fortescue Metal Group. BHP Billiton Group is international metal,
petroleum, and mining public company, which is the world`s largest mining organisation.
There is an overview of environmental and social impact of the operations. Further, there is a
determination of environmental performance and social data of BHP and Fortescue Metal
Group. Being a mining organisation, BHP Billiton faces several challenges during the
accomplishment of sustainability reports. Moreover, examination of compliance with
sustainability reporting of its competitor (Tilahun, Makinde, & Malonza, 2017).
Overview of social and environmental impacts
Although, it is quite difficult to maintain positive social and environmental impact, which
creates impact on stakeholders. BHP Billiton limited confronts many social enforcement in
regards to environmental issues. Mining affects entire ecosystem through exploitation where
it creates lack of appropriate CSR practises. Mining sector are being inclined in the
conduction of code of ethics. Management of the company aims to minimise the negative
impact on local community as social profiling, services and the facilities through direct action
by collaborating several governmental and non-governmental institutes (Belkhir, Bernard, &
Abdelgadir, 2017).

Community consultation has further confirmed several perceived deficiencies in services and
provision of infrastructure (Tilahun, Makinde, & Malonza, 2017). Here is the detailed social
factors related to housing, education, health, and recreations-
On the other hand, the company maintains a positive approach in regards to the
environmental impact. BHP Billiton limited has catered to foresee important significant
environmental impact where it has committed to ensure they accomplish to minimise the
impact by contributing broadly delivering lasting natural benefits. BHP will focus on
reducing the greenhouse emissions at the operations by adopting low emissions technology
(Boiral, & Heras-Saizarbitoria, 2017).
Comparison of quality of social and environmental performance data availed with its
competitor
Fortescue Metal Group BHP Billion Limited
Quality of environmental
performance
The company strives to
attain sustainable and
environmental results with
the help of disciplined
management of environment
BHP Billiton contributes to
environmental and social
features with biodiversity
climate changes, and
mitigation. The strategies

(Szczepankiewicz, &
Mućko, 2016).
The company`s greenhouse
emissions, which is entirely
in relation to diesel oil. For
the first year, Clean energy
Act will affect carbon
scheme rather than reducing
the diesel rebates.
The company has planned to
develop Carbon Acquittal
management plan with its
implementation plan.
Further, it is expected where
carbon price will add nearly
less than 1 percent to the
operating cost of Fortescue`s
operations
(Szczepankiewicz, &
Mućko, 2016).
are aligning with-
Cleaning and sanitation
Life on land
Collaborating so that it can
achieve goals
BHP Billiton supports the
conservation of the
sustainable use of resources
to advantage the upcoming
generation (Paynter, Halabi,
& Tuck, 2019).
Organisation can start
investing with an aim to
improve where the
environment is valued with
society benefits.
It can improve development
planning and elaboration of
appropriate methods to
implementation (Paynter,
Halabi, & Tuck, 2019).
Quality of social
performance
Creating the positive social
change with creating local
communities and
 The negative effect
of BHP Billiton
limited includes

empowering modern
slavery.
Outlining the Fortescue
approach while ensuring
health and the wellbeing of
workforce.
Fortescue`s resources and
influence has created
generational changes in the
Aboriginal’s life
(Stephenson et al., 2018).
The company`s operations
deliver several social
benefits. The company
promises the favourable
impact on culture and
traditions of the Aboriginals.
increased anti-social
behavioural factors,
increasing
competitiveness, and
accessibility to
accommodation.
 For financial analysis
2019, the investment
is summed up to US
93.5 million dollars.
Creating the economic value
to local communities.
(Boiral, & Heras-
Saizarbitoria, 2017).
This comparison must also include GRI reporting of both the companies-
GRI standards is the first worldwide standard to report sustainability. Global practise to
report with a range of environmental, social, and economic effect. Fortescue metals Group
has been ranked at 74 among 18302 organisations. The company categorises the level of CSR
and ESG database. CSR ratings for the company is 54 between 0-100 scales. Overall ranking
in the sector is 64 against all the ratings.

Sustaining and reporting factors GRI Index
Board of directors 49
Leadership ethics 49
Training, safety and health 51
Management of resource 51
Reporting and transparency 51
Human rights, compensation and benefits 49
Diversity 49
Labour relations 49
Discussion of challenges as being faced by BHP Billiton while complying with GRI reporting
standards
With the increasing number of organisation, it is seen that companies will be more
sustainable while operating. These standards brings accomplishment of long-term profits with
social justice and protecting the nature. BHP Billiton limited conveys several disclosures of
company`s effect (negative/positive) (Stephenson et al., 2018). It will include several changes
such as financial risks, tools to measure community, human rights, and tax transparency.
BHP faces several barriers while reporting sustainability-
Widespread and fasten evolution of reporting, frameworks, and standards. Organizations
prioritise work and the profitability to ignore several sustainability reporting, which are
against regulations and rules (Stacchezzini, Melloni, & Lai, 2016).
New processes are tight and complex because it not only engage the stakeholders. Challenges
and threats for independent verification that include employment, collaboration,
displacement, corporate governance, and solid waste (Stephenson et al., 2018).

Lack of support through management with understanding to create fear of misinterpretation
and risky events. Sustainability reports emphasis on stock exchange at the competitive
disadvantage.
Companies did not prioritise sustainability reporting where parties is opposed to regulations
and laws. The disclosure compliance and reporting to make abstract issues tangible when
assistance in the understanding of sustainability development on company`s strategy and
activities. Goals of objectivity of sustainability reporting with the integration of reports,
sustainability reporting is intrinsic element of integration (Stacchezzini, Melloni, & Lai,
2016).
Widespread compliances with GRI reporting standards with Fortescue Metal Group
benefiting potential investors, and other stakeholders of the organisation
This is the evaluation of wholesome compliances with GRI reporting of the competitor
“Fortescue Metal Group.” Organisation promotes greater transparency towards the
government. On the Annual basis, it achieves zero victims at the workplace`s operations. In
2019, Fortescue fined $64000 during the reporting period to provide and maintain working
environment, as the employees are not exposed to environment hazards. The leader has
focused on the creation of culture, which empower every person to look (Freund, &
Schaltegger, 2018).
GRI sustainability report of any company creates transparency among the stakeholders
because the company serves safety, empowerment, stretch targets, integrity, courage,
determination, humility, and enthusiasm. Other key stakeholders attracted to organisation are
employees, customers, shareholders, suppliers, partners, government organisations, local
communities, and contractors (Kaur, & Lodhia, 2018). Maintaining appropriate

communication with the stakeholders with the help of annual reports, organisation’s website,
corporate meetings, intranet notification, and its community programs.
The stakeholder approach assures quality and trust, which has transparency in financial
positioning. In creating standards, companies report contribution with obligation and
integration in the promotional activities. Proliferation of existing proposition with public
transparency in several aspects. GRI reporting encourages consistency across globe with
mandatory compliance for reporting entities (Kaur, & Lodhia, 2018).
Global standards in sustainable system develops the assurance regarding standards availing
clear rules that will balance compliance costs and disclosures. Fortescue Metals Group
removed lasting difference with compliance costs, which they are actually operating.
Organisation has sustainable and long-term commitment towards transparency as the proof
with voluntary development of tax paid reporting. The efficiency of maintaining
transparency, which they attract stakeholders especially investors. External stakeholders
especially customer looking for high quality experience of services. Investors will seek an
opportunity to grow and pace up earnings. The standards of the company will need
environment to accomplish activities and share performance (Belkhir, Bernard, &
Abdelgadir, 2017).
Conclusion
From the above discussion, it is seen that comparing of GRI compliance and standards. The
report analyses the social and environmental impact on the operations of the company.
Mining companies use natural resources in operations of extraction process. BHP undertakes
to accomplish CSR activities by foreseeing the implications of social and environmental
change on the BHP`s activities. Organisations have proposed several strategies while
improving environment round operations. Fortescue Metal Group has conducted CSR

embedding values as being shared by the businesses and communities. It is the capability of
company, which has empowered the individuals in organisation. This approach is the believe
system, which builds strong business and economic opportunities contributing to thrive
communities.
Part-B
Memo
To- The top-level management of the Construction Pty limited
From- The department of management accounting
Date- January 12, 2020
Subject- regarding the enhancement of new equipment in construction pty limited for
strategic initiative
The memo is to promote the strategic initiative to come up with new tools in the company.
Here is the bifurcation of costs on the basis of product chosen such as Trowels and Knives.
1. There are costs, which is associated with using the tools “variable cost” and “Fixed
cost.”
Variable cost- It is the estimation of cost, which is determined through variable inputs as
being used in production. Cost varies with the fluctuation in volume of production (Kaur, &
Lodhia, 2018).
Fixed cost- It is the estimation of fixed inputs, which used in production. These costs do not
fluctuate with change in volume of production. For example- Rent, and depreciation
Total cost- This cost is the total cost of production. Total cost=
= Variable Cost+ Fixed Cost

Based on expense, it is seen that cost of procurement with the use of raw material as being
used for production. Labour cost refers to payment incurred by temporary workers for
services. Preliminary cost will incurred before the starting of business such as interest, rent,
underwriting costs, and product trails. Cost of production include cost of marketing,
advertising, distribution, selling, and promotion (Akin, & Akin, 2018). For the
illustration/example used to analyse Break even analysis includes both variable cost, and
fixed cost associated with products (Knives and Trowels). On the basis of decision making-
Sunk cost- Cost is not altered with change in current business activity. It is irrevocable cost of
business operations and it is irrelevant to business operations (Akin, & Akin, 2018).
Replacement cost- It is the cost of replacing the asset, machinery, plant, and equipment.
Opportunity cost- it is the cost of next best alternative, which is being sacrificed in pursue
chosen action (Freund, & Schaltegger, 2018).
Balance scorecard is a strategic performance tool, which is used to find and enhance several
various internal business activities and finally resulting into external outcomes. Balance
scorecard is the tool to analyse the strategy of construction organisation (Akin, & Akin,
2018). BSC is a tool that has four perspectives including customer perspective, financial
perspective, internal procedure perspective, and learning and growth perspective.
Perspective Strategy
map
Objective Reasons
(Actions with
responsibility)
Customers Retain
maximum
customers
Targets to
increase (20
percent) the
revenue of
Conducting
survey for the
customers in
marketing

existing clients
10 percent
increase in
new
customers.
department
(Thomas, 2019).
Financial Generate
more
revenues
Targets to
increase the
profitability
and revenue
proportion
with 20
percent
Implementation
of CRM
(Customer
Relationship
Management)
through sales and
marketing
department
learning and
Growth
Training
to the
staff
20 percent
increase in
staff skills
30 percent
increase in
research and
development
department to
enhance skills.
Sales and
marketing
department and
HR department
(Salins, Mendon,
& Aithal, 2019).
Internal
business
processes
Increasing
the client
services
Enhancement
of new clients
Revenues
Developing e-
mail lists where
marketing

from existing
employees
department is
responsible
2.
Product Pickaxe Chisels Pans
Total sales 5250000 3250000 4250000
Total variable cost 3141500 1936500 2911500
Contribution 2108500 1313500 1338500
Contribution per unit 28.11 20.21 26.77
Fixed cost/
contribution
peer unit
Fixed cost/ contribution peer unit
Fixed cost/
contribution peer
unit
Fixed cost 245000 245000 245000
BEP (Breakeven point) 8715.75952 12122.71153 9152.035861
Sales volume will be calculated as- Pickaxe Chisels Pans
Desired profit 350000 350000 350000
fixed cost 245000 245000 245000
contribution per unit 28.11 20.21 26.77
Desired sales volume 21166.8445 29440.87086 22226.37281
Calculation of fixed cost
Depreciation 75000
Rent 70000
Fixed cost
14500
0

3. A. Analysis of breakeven analysis is seen as screening tool used to examine desired
profits for sales initiate (Batkovskiy et al., (2017). When conducting breakeven sales,
it is analysed that breakeven sales of Pickaxe, Chisels, and Pans is 8715, 12122, and
9152. Breakeven point is analysed to foresee the situation of no profit and no loss.
Moreover, a desired valued profit is given at $350000.
Products Pickaxe Chisels Pans
Desired Profit 350000 350000 350000
Fixed cost 245000 245000 245000
Contribution per unit 28.11 20.21 26.77
Desired sales volume 21166.84454 29440.8709 22226.37281
Desired value for profit to be generated lead to high sales. Desired profit has the desired sales
volume of Pickaxe, Chisels, and Pans is seen as 21166.8, 29440, and 22226.
With an aim to propose several strategies to generate and improve higher profits. Breakeven
can be improved with few strategies-

Increasing sales and revenues mixes a greater proportion of items, which will lead to higher
contribution. It is important to minimise fixed costs as being incurred through depreciation on
assets and less rental costing place. Increasing market demand leading to changes in business
model (Batkovskiy et al., (2017).
Minimising the labour rework expense are being improved by enhancing production line
errors rather than generating additional revenues. The organisation will offer wide range of
products with different contribution margins (Bril et al., 2018). Use of breakeven point is the
analysis of discovering how organisation will sell the products to recover its associated costs
while conducting business activities. The company can increase its sales mix of products or
service mix to serve with variety of items offered by the organisation. Variable costs have
reduced so that the profitability of the individual can increase. Selling price has increased by
reducing the variable price and increased profit per unit (Bril et al., 2018).
C. With an aim to attain and accomplish several proposed strategies, there is a value of
variable cost, which must be reduced-
Here is one proposed condition, which can improve the breakeven point so as the profit-
Cost of marketing and other costs are minimised by 20000 and 30000.
Proposed Condition
Product Pickaxe Chisels Pans
Total sales 5250000 3250000 4250000
Total variable cost 3091500 1886500 2861500
Contribution 2158500 1363500 1388500
Contribution per unit 28.78 20.9769231 27.77
Fixed cost/
contribution peer
unit
Fixed cost/
contribution
peer unit
Fixed cost/
contribution
peer unit
Fixed cost 245000 245000 245000
BEP (Breakeven point) 8512.85615 11679.5013 8822.470292
What if desired profit is maximised

-
Sales volume will be calculated as- Pickaxe Chisels Pans
Desired profit 450000 450000 450000
fixed cost 245000 245000 245000
contribution per unit 28.78 20.9769231 27.77
Desired sales volume 24148.71438 33131.6465 25027.00756
Here is an improvement in BEP (sales volume); variable cost for Pickaxe, Chisels, and Pans
have reduced by 50000. From this condition, it is seen that with the reduction in variable
costs lead to change in contribution per unit. From the above situation, it is seen that
contribution has increased per unit. BEP has reduced with 8512.85615, 11679.5013, and
8822.470292where no profit and no loss is achieved so soon. For further production, the
company will achieve higher profits. Lower breakeven volume can increase return on
investment, pursuing new and more profitable opportunities. Lowering breakeven can work
wonders in business model (Kim et al., 2017). One can target smaller in more niches that are
attractive. One can tailor the products and other services to niche wants by availing them
value to customer. For example- Construction Company can manufacture products that are
more distinctive appealing to narrow niche consumers because they have lower break-even
volume.
The desired profit is marked higher “450000.” The desired sales volume for Pickaxe, Chisels,
and Pans is 24148, 33131, and 25027.
Yours sincerely
Sales and production team of construction Pty Limited

References
Akin, I., & Akin, T. (2018). Economic impact of digital dermatitis treatment on a dairy farm:
an application of the break-even analysis. Ciência Rural, 48(8).
Batkovskiy, A. M., Semenova, E. G., Trofimets, E. N., Trofimets, V. Y., & Fomina, A. V.
(2017). Statistical simulation of the break-even point in the margin analysis of the
company. Journal of Applied Economic Sciences, Romania: European Research
Centre of Managerial Studies in Business Administration, 12(2), 558.
Belkhir, L., Bernard, S., & Abdelgadir, S. (2017). Does GRI reporting impact environmental
sustainability? A cross-industry analysis of CO2 emissions performance between
GRI-reporting and non-reporting companies. Management of Environmental Quality:
An International Journal, 28(2), 138-155.
Boiral, O., & Heras-Saizarbitoria, I. (2017). Corporate commitment to biodiversity in mining
and forestry: identifying drivers from GRI reports. Journal of Cleaner
Production, 162, 153-161.
Bril, A., Kalinina, O., Zotova, E., & Vilken, V. (2018). Increasing the efficiency of personnel
management in municipal organizations through controlling operational risks and
fixed costs. In MATEC Web of Conferences (Vol. 170, p. 01040). EDP Sciences.
Kaur, A., & Lodhia, S. (2018). Stakeholder engagement in sustainability accounting and
reporting: A study of Australian local councils. Accounting, Auditing &
Accountability Journal, 31(1), 338-368.
Kim, E. K., Shin, J. Y., Castañeda, A. M., Lee, S. J., Yoon, H. K., Kim, Y. C., & Moon, J. Y.
(2017). Retrospective analysis of the financial break-even point for intrathecal
morphine pump use in Korea. The Korean journal of pain, 30(4), 272.

Lüdeke-Freund, F., & Schaltegger, S. (2018). The sustainability balanced scorecard: An
introduction to the SBSC and its links to accounting and reporting. In Measuring and
Controlling Sustainability (pp. 33-53). Routledge.
Paynter, M., Halabi, A., & Tuck, J. (2019). Storytelling and Corporate Social Responsibility
Reporting: A Review of BHP 1992–2017. In The Components of Sustainable
Development (pp. 205-230). Springer, Singapore. Lewellyn, P. G., & Logsdon, J. M.
(2016, July). How Sustainability Reporting Is Maturing: A Preliminary Assessment of
the Impact of GRI’s G4 Guidelines. In Proceedings of the International Association
for Business and Society (Vol. 27, pp. 122-132).
Salins, M., Mendon, S., & Aithal, P. S. (2019). Sustainable Development Strategy through
GRI with Reference to VEDANTA Company. International Journal of Case Studies
in Business, IT and Education (IJCSBE),(2019), 3(1), 48-55.
Stacchezzini, R., Melloni, G., & Lai, A. (2016). Sustainability management and reporting: the
role of integrated reporting for communicating corporate sustainability
management. Journal of Cleaner Production, 136, 102-110.
Stephenson, W., Donlin, L. T., Butler, A., Rozo, C., Bracken, B., Rashidfarrokhi, A., ... &
Darnell, R. B. (2018). Single-cell RNA-seq of rheumatoid arthritis synovial tissue
using low-cost microfluidic instrumentation. Nature communications, 9(1), 791.
Szczepankiewicz, E., & Mućko, P. (2016). CSR Reporting practices of Polish energy and
mining companies. Sustainability, 8(2), 126.
Thomas, E. A. (2019). How Useful Is the Global Reporting Initiative (GRI) Reporting
Framework to Identify the Non-financial Value of Corporate Social Performance
(CSP)?. In Responsible Business in Uncertain Times and for a Sustainable
Future (pp. 37-87). Springer, Cham.

Tilahun, G. T., Makinde, O. D., & Malonza, D. (2017). Modelling and optimal control of
pneumonia disease with cost-effective strategies. Journal of biological
dynamics, 11(sup2), 400-426.