The cost and management accounting

Running head: COST AND MANAGEMENT ACCOUNTING
Cost and management accounting
Name of the Student
Name of the University
Author Note

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Executive summary:
The report is prepared to demonstrate the initiatives and stance taken by the accounting
professional of Australia on sustainability and the corporate social responsibility. For
explaining this, then role played by accounting professionals in developing the concept of
corporate social responsibility is also outlined in the report. In addition to this, report also
illustrate how BHP Billiton Limited demonstrate its social and environmental accountability.
Such accountability by the comp any has been done by analyzing the data retrieved from the
financial report of the organization.

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Table of Contents
Introduction:...............................................................................................................................3
Stance and initiative of the Australian accounting profession on the corporate social
responsibility:.............................................................................................................................4
Evaluating how BHP Billiton Limited has demonstrated its environmental and social
accountability:............................................................................................................................7
Conclusion:..............................................................................................................................13
References list:.........................................................................................................................14

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Introduction:
The paper is developed to provide a discussion on the initiatives and the stance taken
by the accounting professionals of Australia. Accounting professionals of the country has the
objective of bringing change in the entire system with the degree of coordination and
cooperation of the professionals. Sustainability initiatives taken by the organizations is based
on the efforts taken by the professional bodies and the growing pressures of maintaining
sustainability and being socially responsible is increasingly accounted by the organization
(Brizek, 2018). The employees, government, investors, public and customers, continuously
demand greater transparency and improved corporate sustainability. In addition to this, the
paper also incorporates the discussion on how the BHP Billiton accounts its environmental
and social sustainability efforts.
Stance and initiative of the Australian accounting profession on the corporate social
responsibility:
Representation of the efforts concerning the corporate social responsibility forms one
of the essential components of the accounting. There is a major contribution of accounting in
CSR. There is variety of issues around the companies where they have to interact with the
society. There should be a consideration regarding CSR form the perspective of accountancy,
such consideration is necessary because there is a link between social and environmental
reporting. Here the research is concentrated on reporting the environmental and social
problems. Management accountant, financial accountants and the auditors are the three
important roles of being an accountant. Here the financial accountant can be interested in
social and environmental aspects of assets and liabilities. The costa and benefits is associated
with management accountant (Epstein, 2018).

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This section discusses about the stance and initiative of Australian Accounting
Profession on CSR. In Australia, the Corporate Social Responsibility has become a
significant phenomenon. The organizations use CSR as they had a great influence in business
communication. Through CSR, the company can get a worldwide communication with their
economic, social and environmental performance.. Based on the annual report, it is seen that
in the process of making business of producing energy and minerals; it also necessarily
affects the society and environment. In social accounting, the stakeholders need to
communicate about the organization’s actions as their social and environmental effects to
their society. The company needs to make discourse about its social performance to the
public. Becoming acquainted with the advantages and disadvantages of product of the
company is essential for the people to make responsible decisions (Setó & Papaoikonomou,
2016).
The use of accounting principles and concepts in relation to organizations impact to
the natural environment is referred to as environmental accounting. The scope of financial
accounting is boarder because of social and environment accounting. Hence, the results of
accountability for social and environmental concerns are presumed to be capable of swaying
the outcome of external events through their accounting practices (Duff, 2017).
The international organization standard assist the organizations in effectively
addressing their social responsibility issues as such issues have considerable impact on the
performance and is relevant to the process, operations, mission, vision, customers,
stakeholder, communities and employees (Lewis, 2016). In addition to this, the standard
presents a comprehensive documentation of all the core social and environmental
responsibilities. This requires the organization to engage and assist their stakeholders so that
the claims and credibility of their sustainability reports are enhanced. They also intend to
make the social responsibility operational by providing practical guidance. There are seven

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core subjects that are outlined to the organization under this standard and these includes
human rights, governance, fair operating policies, environment, labor practice, issues of
consumers and involvement of community.
It is stated in the draft that is published on the issues of corporate social responsibility
that the organizations are provided with the guidance on how the programs related to social;
environment can be managed, implemented and established. In the draft, CSR is defined as a
instrument that assist in the integration of the operations of the company with that of
environmental and social issues and communicating the same to their stakeholders. There is
also limitations to implement CSR which have been rehearsed by economists who argue that
the organizations should focus mainly on the provide motivation and government are left to
handle any social problems. The government intervention will remain essential for the
meaningful actions and the sustainable government that have to adopt by the corporations.
The organization has taken an initiative of the Certified Public Accountant program’s
structure, which incorporates sustainability into governance (Brizek, 2018).
Elements of sustainability:

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(Source: Cimaglobal.com, 2019)
Corporate social responsibility (CSR) is the practice of managing the social role of the
corporations or the reporting entity. There has been increasing scrutiny on the corporate
document due to growing intersection of economic, social and cultural factors. Majority of
the companies listed on the stock exchange of Australia have started developing the policies
of corporate social responsibilities and this resulted in emerging criticism about the
companies being involved in window dressing. An approach of material business risk has
been endorsed by ASX that requires the integration of the operational practices and strategic
decision-making with the CSR policies and such integration is done at all level of the
management of companies. However, it is argued that the action of government should help
in facilitating the systemic change for managing the CSR governance practice. In addition to
this, the deleterious impact of the corporate governance do not cause the legislation of the
CSR to be made mandatory. For the modern organization, it has become essential to take into
account the impact that is created by their operations on the stakeholder and whether their
activities are in the best interest of the stakeholders.
Evaluating how BHP Billiton Limited has demonstrated its environmental and social
accountability:
In this section, the efforts taken by BHP Billiton Limited to demonstrate its social and
environmental accounting is illustrated. As stated in the report, Sustainability is the heart of
everything and is integrated into all the activities done by the organization. As BHP Billiton
is a resource industry, it deals mainly with the natural resources. When an organization deals
with the natural resources there should be an environmental stability. The approach of the
BHP Billiton has acknowledged and has significant environmental impacts. It ensures that

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there is an effective management through understanding and minimizing impacts and
contributing more to deliver environmental benefits (Bhp.com, 2019).
The sustainability report of BHP Billiton Limited is prepared at the comprehensive
level reporting according to the requirements of the Global reporting initiative standards and
aligns with the international council on the framework of sustainable development (Bhp.com,
2019). The company is also engaged in the interaction with number of their stakeholders and
they have a diversified method and frequency of such engagement. The government officials
support the CSR policies and the tax proposals.
The benefits that the BHP Billiton received concerning the CSR is; the direct costs
can be reduced; the productivity of the workers can be improved; there is a less management
risk and lastly the competitive image can be improved. BHP Billiton produces energy and
mineral for various clients globally and it considers itself as a part of resources. The company
has various policies and procedures in his charter, which acts as an internal guide in doing
business. BHP Billiton describes its purpose in the charter to create long-term value in the
process of discovering, developing and converting natural resources (Bhp.com, 2019).
The organization intends to create long-term value for their stakeholders, this can be
done by supporting their communities, and when the sustainability of the operations is
safeguarded (Arena et al., 2019). Sustainability for BHP Billiton means that the company is
operating in an environmental responsible manner and the safety and health of organizations
is put first. In addition to this, the community, wellbeing of the people and environment is
accounted in all the activities done by the company. For improving the wellbeing of future
and present generation, the goals have been designed by the sustainable development goals of
the United Nations. Organization is also engaged in contributing towards such achievement
by making voluntary social investment and directing the business activities (Bhp.com ,2019).

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The International Council on Mining and Metal’s Sustainable Development
Framework aligned the sustainability report adheres to GRI. The board of BHP Billiton
overseas the sustainability approach with the Board’s Sustainability approach. In the
sustainability approach, the day-to-day activities and the company base their decisions on the
mandatory minimum performance. The sustainability committee overseas environment,
human right matters, health, safety, community and others including the systems for
managing and identifying the risks. Boards are appointing the Non-executive Directors for
the members of the sustainability committee (Uddin et al., 2015).
The values of respect, integrity and accountability is defined by the business conduct
and ethics. The organization is committed to bring transparency, working with integrity,
ethical and respect. As BHP is the largest mineral and mining company, public acceptance
and trust forms the basis of business model. Some of the facts that guides the commitment
and approach of the company is of openness accountability, responsibility and fairness
(Globaljournals.org, 2019).
In the charter, the commitment of anti-corruption is embodied. The risk of anti-
corruption laws is managed and identified by specific anti-corruption procedure which
outlines the requirement which are mandatory to observe. Such program helps in meeting the
requirement of the applicable law, UK bribery Act and act of US Foreign Corrupt Practices
Act. The Australian Criminal code and applicable laws of all places where the business are
located. There is a part of annual training where the employees and community partners take
part. The compliance frameworks of BHP is mandatory designed by the ethics and
compliance for addressing the issues such as anti-bribery, compliance issues and corruption
(Yakovleva, 2017).

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One of the highest priorities, which are impacted in the sustainability report, is the
safety of the employees. As there are internal hazards in operation due to location and nature.
A team was established to identify the organizational improvements for preventing several
injuries from occurring. The independent senior leaders external expert and facilitated the
investigation. Moreover, to improve the management process group-wise decisions are taken
for review. Improvement and simplification of the existing global risk framework is done by
the global risk improvement plan so that there is informed decision-making. As part of the
focus in in-field verification, there is a control design where the main motive is to remove
people from sources of danger (Bhp.com, 2019).
There are mandatory controls through which the identification of the risk concerning
health of the contractors an employee are done. Risks related to health is included at the
workplaces, which includes professional coverage to coalmine dust, noise and mental health
impacts. The knowledge risks can be improved through technology advances and
improvements in reporting. It is seen that there is an increase in the reporting and recognition
of long latency diseases. From the report, it is seen that noise-induced hearing loss (NIHL)
and musculoskeletal illness (MSI) are some of the reported occupational illness. It is
anticipated that the requirement for fit testing for hearing protection devices will result in
reduction in NIHL cases. The identification and controlling of manual handling hazard will
help in reducing the inherent risk of the workforce and exposure to the diversifying
workforce (Bhp.com, 2019).
The initial focus of the organization intend to aware about the mental conditions,
reduction in mental stigma illness and on culture. The program is expanded as it includes
thriving and supporting healthy workforce. The Resilience program was developed to help
the people support and improve their mental health. A focused program was made where it

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enhanced the Program of assisting employees, which enable services to be performed on a
consistent basis offered to the Australian company.
It is always ensured by BHP Billiton that they contribute positively to the sustainable
development and they have the commitment that the amount if pretax profits that is invested
should not be less than one percent. Furthermore, organization has also a charitable
foundation that is funded by the company itself and they have the objective of addressing the
challenges relating to the global sustainable development. From the communities they have to
identify the opportunities and minimize the negative impacts to deliver a sustainable future
for all. The Social Investment Framework which the BHP implemented includes three
refrains; firstly governance; secondly human capability lastly social inclusion. The
relationship with the stakeholders is based on some of the factors such as openness, mutual
respect, ongoing conversation and transparency over the activities (Bhp.com, 2019).
It is important to understand the collaborative community approach for improving the
lives of community impacted by the operations of business. In such approach, it is important
to identify the stakeholders because they have great impact on conducting opportunities and
creating social impacts. Secondly, the organization should also implement some of the
programs such as Human Rights plan, Stakeholder management and Engagement plan and
plans of community development. through this planning company will execute and will look
on the complaints and grievance mechanism. Thirdly, an effective implementation is required
so that the staff should be aware culturally. The decision making process should be inclusive
and culturally appropriate. Some of the activities concerning social investment relates to
development of community partner and governance framework that are robust. There should
be a robust governance frameworks and community partner due diligence for social
investment activities so that they can give timely response to community incidents (Cubby,
2010). Lastly, the community should monitor performance through community perception

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surveys. Some of the analysis performed by the company include analysis of community
incident, research and benchmarking Complaints and grievance analysis, evaluation and
monitoring (Bhp.com, 2019). Through this analysis, the organization monitors the
performance and check the social performance.

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Conclusion:
It can be concluded that BHP Billiton takes its ethics and social responsibility
seriously. This is demonstrated by investing significant time, money and resources in
numerous sustainable development and socio-economic programs. The auditor analyses the
reports and provide opinions that depict the right and fair view of the company’s
performance. After the initiative, the auditors highlight the contrast of the working pattern of
the management. The involvement of International Organization for Standards in the
consideration of Corporate Social Responsibilities has a positive impact on the organization,
as there were various reports were discussed based on the previous data. The approach of the
Australian conceptual framework helps the auditors in objectivity of accounting in financial
reporting. The sustainability approach was considered as the core value because it put health
and safety first, and environmentally responsible supporting the communities.

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