Contemporary Accounting Practice: Analysis of Global Reporting Initiative by Wesfarmers and BHP Billiton Limited

This report analyzes the Global Reporting Initiative taken by Wesfarmers and BHP Billiton Limited, two companies listed on the Australian stock exchange, in terms of non-financial or sustainability reporting. The report explains the purpose of providing integrated reporting, describes the key stakeholders having an interest in the group, and evaluates the reports in relation to quality of information, consistency with relevant information, and meeting the needs of stakeholders.

Running head: CONTEMPORARY ACCOUNTING PRACTICE
Contemporary accounting practice
Name of the Student
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Author Note

CONTEMPORARY ACCOUNTING PRACTICE
Introduction:
The report is prepared for analyzing the Global Reporting Initiative taken by two
companies that is listed on Australian stock exchange. Two companies that are selected for
the evaluation of non financial or sustainability reporting are Wesfarmers limited and BHP
Billiton Limited. Wesfarmers limited is a supermarket chain having a diversified business
portfolio operating in hardware, supermarket, departmental stores, energy distribution, gas
processing, chemicals, safety products and coal mining. BHP Billiton is a leading resource
company of the world based in Melbourne, Australia and is engaged in processing and
extraction of oil, gas and minerals. The purpose of providing integrated reporting is explained
in context of the chosen companies. Differences and similarities between the sustainability
reporting of each company is explained by critical evaluation in terms of quality of
information, whether the needs of stakeholders are met by the information presented in the
report (Sethi et al. 2017). Furthermore, analysis has been done whether the sustainability
report is consistent with the frameworks or the relevant applicable standards.
Describing the purpose of each company providing GRI (Global Reporting Initiative)
The sustainability report of BHP Billiton Limited is prepared by aligning with the
lines of global reporting so that it provides support to all areas of organization. Assessment of
materiality is done in accordance with the principles of Global reporting initiative that helps
in defining the content of report through cycle of prioritization, identification, review and
validation. Sustainability strategies are informed with the help of materiality assessment that
helps in ensuring that stakeholders are provided with the transparent coverage of key topics.
Strategy of organization and value of stakeholders are created by responding and identifying
of the key sustainability issues. The criterion that is used for basis of sustainability reporting
includes the standards of GRI that is published by GRI (Alonso et al. 2014).

CONTEMPORARY ACCOUNTING PRACTICE
The sustainability report of Wesfarmers limited is prepared according to the standard
of Global reporting initiative. Purpose of adopting such global reporting standard is to
provide stakeholders with transparent information about opportunities and sustainability
risks. Performance of each of materiality issues are published and measured in the
sustainability report of Wesfarmers limited. Sustainability at Wesfarmers is about managing
and understanding the ways activities impact the environment and community for ensuring
value creation in future. At Wesfarmers, sustainability is board level, critical, strategic issue
and governance and the materiality process helps in guiding the content of report. The
significant environmental and social impact that influences the decision and assessment of
stakeholders is reflected in materiality issues.
Explanation of key stakeholders having an interest in the group:
BHP Billiton being a global company is required to interact with range of
stakeholders that comprise of community based organization, business partners, regulator and
government, contractor and employees, labor union, industry peers and association, media,
local and indigenous communities, society partners, non government organization, suppliers
and customers, investment organization and shareholders. The frequency and method of
communication used to communicate sustainable information to stakeholders are diverse.
Stakeholders such as contractors and employees are engaged through internal channels. Some
of the channels that are used by organization for communication includes newsletter, intranet,
e mail and town halls, inviting and comment through surveys of employee perception.
The stakeholder and customers of Wesfarmers are increasingly diverse and in order to
understand the expectation of stakeholders, they engage with them on direct basis. Objective
of board of Wesfarmers limited is to provide the shareholders with shareholders with
satisfactory return by fulfilling the responsibilities and obligations of corporate governance in

CONTEMPORARY ACCOUNTING PRACTICE
the best interest of stakeholders and company as a whole. The practice and regulatory
framework of governance is regularly reviewed by organization to ensure that expectation of
shareholders and market price is reflection on consistent basis. Recommendation of the task
force is supported by Wesfarmers on financial disclosures related to climatic issues that
inform shareholders about the information in relation to managing the risks on climatic
change. Interest of shareholders such as customers, suppliers, employers and wider
community is enhanced and protected by the management of organization.
Identification and analysis of similarities and dissimilarities between each report:
From the analysis of sustainability report of both the organization, it can be inferred
that Wesfarmers and BHP Billiton Limited prepares their sustainability report according to
the guiding principles and standard of Global Reporting initiative. Both the organization
takes into account the interest of their diversified group of stakeholders and it is believed by
organization that for the implementation and delivery of strategies, they emphasize on
maintenance of high standard of governance. Furthermore, the content of materiality is
appropriately be explained on context of sustainability and hence materiality analysis is of
considerable importance to reporting guidelines. Hence, the organizational strategy well
aligns with the sustainability and governance standards.
Evaluation of report in relation to quality of information:
Analysis of sustainability report of Wesfarmers and BHP Billiton limited, the quality
of information presented in the report of later is somewhat adequately emphasizes as against
former company. This takes into account management of risks, approach towards sustainable
development, sustainability framework, materiality analysis, boundary and scope of reporting
(Junior et al. 2014). However, there is segmented presentation of different departments of

CONTEMPORARY ACCOUNTING PRACTICE
organization in terms of sustainability. In addition to this, the supply chain of Wesfarmers is
explained in context of their sustainability practices.
Evaluation of report in relation to consistency with relevant information:
At Wesfarmers, steps are taken to ensure consistency in policies and procedures of
sourcing between Kmart and target. In order to ensure consistency across distribution centers
and stores, organization takes steps for appropriate measures. The framework of management
of BHP Billiton Limited intends to ensure consistency across concepts, terms and strategies
(Lewellyn and Logsdon 2017). Analyzing the sustainability report of BHP Billiton limited, it
can be seen that there is no mentioning of consistency in detailed manner.
Evaluation of report in relation to meeting the needs of stakeholders:
Wesfarmers intends to create value for stakeholders in a sustainable way in the
communities and environment. It is expected by the stakeholders to adhere by conducting
business in an ethical way so that it helps in fulfillment of goals. The supply chain of
stakeholders and partners are diversified within the businesses of Wesfarmers. Stakeholder
engagement is one of the important parts of sustainability analysis of the group. An open
engagement with the external stakeholders is treated including relationship with suppliers and
government. The commitment of business is to build collaborative and strong relationship
with suppliers. In order to understand the human rights and ethical sourcing of suppliers,
engagement stakeholders is given considerable importance (Vigneau et al. 2016). For BHP
Billiton limited, the sustainability reporting is prepared for accounting to the diversified
stakeholders. The forum of BHP on corporate responsibility is a key part of program of
stakeholder engagement. Activities of stakeholder engagement are documented at a local and
regional level (Hąbek and Wolniak 2016). Efforts are taken by organization to engage with

CONTEMPORARY ACCOUNTING PRACTICE
external and internal stakeholders and strategies taken by organization are consistent with the
sustainable reporting.
Conclusion:
From the analysis of the sustainable reporting of selected organization from
Australians stock exchange that is Wesfarmers limited and BHP Billiton Limited, both the
organization places considerable importance on stakeholder engagement. The reporting is
prepared in accordance with the standards and guiding principles of Global reporting
initiative by well aligning with the strategy of organization. Needs of diversified stakeholders
are addressed using the program of stakeholder engagement. There is no much detailed
disclosure on the information consistency of both the organization as analyzed from their
sustainable reports. Furthermore, the reports of both the organization delivers quality
information that assist stakeholders in taking relevant decision.

CONTEMPORARY ACCOUNTING PRACTICE
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