Casestudy of A current Contemporary issue in Accounting

A current Contemporary issue
in Accounting

EXECUTIVE SUMMARY
The report summarizes the different social issues faced by Wesfarmer limited company
while operating its business in the market. It explains the different CSR activity such as
campaign, awareness program, career development program, training, etc. to resolve the social
issues. It also explains the impact of social issues and CSR activities on the share price of
Wesfarmer limited company.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Current social issues and their impact on company performance................................................4
Impact of social issues on share prices........................................................................................6
RECOMMENDATION...................................................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Contemporary accounting issues refers to the corporate issues such as corruption, bribery,
succession planning, IT governance, health and safety, environment, equal opportunity, growth
and strategy etc. which affect the accounting function of the company. Wesfarmer limited is
conglomerate Australian company and its headquarter are in Perth, Western Australia. It was
founded in 1914 and served its product and services in different area such as Australia, India,
New Zealand, United Kingdom, Ireland etc. They mainly deal in retail, coal mining and industry,
chemicals, fertilizer and safety products. The study highlights the current social issues in
Australia and their positive and negative impact on Wesfarmer company. They explain that how
the CSR activities helps to deal with social issues. It also explains the impact of social issues on
the share prices of company in the market.
MAIN BODY
Current social issues and their impact on company performance.
Current social issues
The social issues such as digital changes, ethical issue and human rights, supply chain
transparency etc. affect the business of the company in both positive and negative manner. Some
social issues can be rectified by the Corporate social responsibility while some issues can not be
solved (Buchheit and et.al., 2015). The focus of government and society to reduce the carbon
footprints and carbon emission force the Wesfarmer company to improve their productivity and
operational work to maintain the sustainability of the environment. The aim of Wesfarmer is to
maintain their performance in the external environment to protect the community and
environment to ensure that they work toward creating future value. Wesfarmer company has to
face various social issues such as:
Environment protection: Government and society force the Wesfarmer company to
produce this product which less harm to the society. It also forces them to regulate the activities
on regular basis to understand the impact on the society (Crane, Matten and Spence, 2019). The
coal mining activity and chemicals production increases the pollution in the environment and
also increases carbon footprints. The different corporate social responsibility activities force the
company to reduce the carbon footprints by controlling their activities.
Positive/negative impact on company

As per the annual report of Wesfarmer company they contribute in the environment to
reduce the carbon emission through CSR activities. It makes positive impact on the society and
company performance. In CSR activities they conduct a market survey with the voluntary
participation of the employees to measure the impact of Wesfarmer company productivity on
environment (Dennis and Johnstone, 2016). The CSR activity of Wesfarmer company help to
reduce the intensity of greenhouse emission gas impact by 16% over the last five-year. It also
helps the company to gain the greater market share by building trust with the staff and customer.
The corporate social responsibility activities help Wesfarmer company to reduce landfill waste
and water usage (Yang and Aggarwal, 2018). CSR activities provide a way or direction to the
Wesfarmer company to manage their waste and contribute in environment.
Equality of opportunities: It refers to provide equal opportunity to both male and
female employees in the company and gave them equal chance to show their talent, idea, skills
and knowledge to contribute in the profitability of Wesfarmer company (Dijkmans, Kerkhof and
Beukeboom, 2015). To provide equal chance to employees Wesfarmer company focus on job
performance and career development programs. According the sustainability report of
Wesfarmer company 54% women and 46% men work in Wesfarmer and their aim is to improve
the leadership position of women by providing equal opportunity.
Positive/negative impact on company
In CSR activities they focus on creating inclusive work environment to support the
employees by encouraging them to give their 100% and toward the common goal. Wesfarmer
company also provide the training and development program to their employees to prepare them
for work in risky environment. The CSR activities make a huge impact in the performance of the
company (Ferris, Javakhadze and Rajkovic,2017). In CSR activity they encourage the employees
to participate in organization performance and appraise them according to their ability and
knowledge.
Product liability: It refers to provide safe and secure products to the customer and also
focus on maintaining the sustainability of the environment. In other words' product liability
refers to liable the manufacture and seller for placing defective order in the market or customer.
Defective product affects the life of the customer (Schaltegger and Burritt, 2017). It forces
Wesfarmer company to set quality standard for the fertilizer and chemicals provided to the

farmer and check the quality of each product (Lim and Shim, 2019). It helps them to ensure that
the product are free from defects and does not harm the life of farmers and customer.
Positive/negative impact on company
In CSR activity Wesfarmer company aware the farmer regarding the usage of fertilizers
and chemicals in their farmyard to improve their knowledge. It makes both positive and negative
impact on the company performance. In positive manner it helps to improve the brand image of
the company and gain the trust of the farmer in their products which indirectly increase
profitability (Martínez‐Ferrero, Garcia‐Sanchez and Cuadrado‐Ballesteros, 2015). But at the
same time it also negatively affect the company. The CSR activity increases the cost and
expenses of Wesfarmer and reduces their profit in the market.
Health and safety: As per the sustainability report of Wesfarmer company they focus on
providing healthy and safe environment to their employees. They also focus on providing safe
products to the customer, so they can increase their customer share (Muslu and et.al., 2019). The
government force the company to take all the safety measures and provide safe & secure work
environment to the employees.
Positive/negative impact on company
In CSR activities Wesfarmer company aware the employees regarding the health and
safety issues to minimize the injury frequency rate. As per the sustainability report they reduce
the injury frequency rate by 15% in 2017. By CSR activity Wesfarmer company increases the
safety awareness and reduces the risk on workplace (Nuhu, Baird and Bala Appuhamilage,
2017). The number of “Protect your hand” campaign, “Rita the ruler” video etc. helps to reduce
the risk in work environment by maintaining three meter exclusion zones around forklift. The
SMS alert in CSR activity also help the company to communicate urgent updates about forklift
safety. But at the same time CSR activity increases the cost of the company and require huge
time to implement the changes in the company. It also takes time to develop the habit of
concerning all the safety measures in daily life (Sustainability Report, 2017).
Impact of social issues on share prices
The social issues make huge impact on the share price of Wesfarmer limited company.
The social issue such as environment protection, health and safety, product liability, equal
opportunity etc. decreases the share price of the company (Qiu, Shaukat and Tharyan, 2016). But
the measures taken by Wesfarmer company to resolve the social issues help them to increase the

share price in the market. The CSR activities increases the participation of employees and
customer in the company (Redshaw, 2017). It helps to build good brand image in the eyes of
shareholder and customer which encourage them to invest in Wesfarmer company. It ultimately
increases the share price and help them to gain greater market share.
CSR activities helps to resolve the social issues' by encouraging and aware the employees
regarding health and safety norms, environment protection, equal opportunity etc. The share
price of company increase from 31.72 to 35.25 in 2019 which indicate that the overall share price
is increased (Sustainability report, 2018). The CSR activity helps to build good relation with the
suppliers and customer which ultimately helps create good brand image in market and increases
the share price by attracting more and more investors and customers.
RECOMMENDATION
 It would be recommended to the Wesfarmer company that they have to regulate their
activity on specific time period to ensure that weather the CSR activities done by them
make positive impact on the performance or not.
 They also have to conduct market research on regular time interval to identify the social
issues and various ways to resolve this issues.
 Wesfarmer company have to organize different campaign for farmers in their locality to
aware the farmer regarding the pros and cons of the usage of fertilizers.
 On their workplace Wesfarmer company have to set standard to measure the performance
of the employees and encourage them to participate in organization activity by providing
rewards and incentive on their successful participation.
CONCLUSION
The report summarizes that the social issues make a huge impact on the performance of
the company. Wesfarmer company conduct different Corporate social responsibility activities to
encourage employees to participate in company activities and minimize the impact of social
issues on company performance. CSR activities positively and negatively affect the company. In
positive sense it increases the company productivity and profitability by building good brand
image and in negative sense CSR is time and cost consuming activity. The report also summarize
impact of social issues on share price of the company that whether the CSR activities is helpful
to increase the share price of Wesfarmer company or not.

REFERENCES
Books and journals
Buchheit, S. and et.al., 2015. A contemporary analysis of accounting professionals' work-life
balance. Accounting Horizons. 30(1). pp.41-62.
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Dennis, S. A. and Johnstone, K. M., 2016. A field survey of contemporary brainstorming
practices. Accounting Horizons. 30(4). pp.449-472.
Dijkmans, C., Kerkhof, P. and Beukeboom, C. J., 2015. A stage to engage: Social media use and
corporate reputation. Tourism management. 47. pp.58-67.
Ferris, S. P., Javakhadze, D. and Rajkovic, T., 2017. The international effect of managerial social
capital on the cost of equity. Journal of Banking & Finance. 74. pp.69-84.
Lim, J. S. and Shim, K., 2019. Corporate Social Responsibility Beyond Borders: US Consumer
Boycotts of a Global Company Over Sweatshop Issues in Supplier Factories Overseas.
American Behavioral Scientist, p.0002764219835241.
Martínez‐Ferrero, J., Garcia‐Sanchez, I. M. and Cuadrado‐Ballesteros, B., 2015. Effect of
financial reporting quality on sustainability information disclosure. Corporate Social
Responsibility and Environmental Management. 22(1). pp.45-64.
Muslu, V. and et.al., 2019. Corporate social responsibility report narratives and analyst forecast
accuracy. Journal of Business Ethics. 154(4). pp.1119-1142.
Nuhu, N. A., Baird, K. and Bala Appuhamilage, A., 2017. The adoption and success of
contemporary management accounting practices in the public sector. Asian Review of
Accounting. 25(1). pp.106-126.
Qiu, Y., Shaukat, A. and Tharyan, R., 2016. Environmental and social disclosures: Link with
corporate financial performance. The British Accounting Review. 48(1). pp.102-116.
Redshaw, S., 2017. In the company of cars: Driving as a social and cultural practice. CRC
Press.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
and practice. Routledge.
Yang, L. W. and Aggarwal, P., 2018. No Small Matter: How Company Size Affects Consumer
Expectations and Evaluations. Journal of Consumer Research. 45(6). pp.1369-1384.
Online
Sustainability report. 2018.[Online]. Available through :
<https://sustainability.wesfarmers.com.au/>
Sustainability Report. 2017. [Online]. Available through :
<https://sustainability.wesfarmers.com.au/media/2464/2017-wesfarmers-sustainability-full-
report.pdf>