Management Accounting for Non-Financial Reporting

This report explores the ways used by Dorel Industries Inc for reporting non-financial information with the assistance of management accounting concept. It discusses the importance of management accounting concepts in non-financial reporting and analyzes the procedures used by Dorel Industries Inc to report non-financial information. The report concludes by highlighting the effectiveness of Dorel Industries Inc in using management accounting for disclosing non-financial information.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction................................................................................................................................2
Management Accounting Concepts for Non-Financial Reporting.............................................2
Procedures used by Dorel Industries Inc to Report Non-Financial Information.......................3
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
There used to be a time when companies were only responsible for disclosing the
information of their financial performance to the shareholders and other stakeholders.
However, the scenario has drastically changed in the recent years as business organizations
now have the responsibility to disclose the information of their performance in non-financial
areas that are called non-financial information (Lokuwaduge & Heenetigala, 2017). Since
there is an increase in the awareness about different sustainability, social and governance
related issues, the companies are now required to provide environmental, social and
governance information in their different public reports (Camilleri, 2015). This report takes
an honest attempt to explore the ways used by Dorel Industries Inc for reporting non-
financial information with the assistance of management accounting concept.
Management Accounting Concepts for Non-Financial Reporting
In general, management accounting is concerned with the financial and accounting
information of the companies, but certain aspects of management accounting have major
impact on the reporting of non-financial information of the companies. In the recent years,
managements of the companies are considering the aspects of management accounting for the
reporting of non-financial information of their businesses (Theriou, 2015). Most specifically,
Non-financial Report is considered as a crucial management accounting tool for the
businesses to report the information of performance in the non-financial areas. Non-financial
report works as a major mean for the development of effective corporate strategies. At the
same time, firms become able to disclose information on environmental, social and
governance phases by using different non-financial reports. Moreover, stakeholders largely
use these reports for assessing the companies’ performance in non-financial facets which
creates a strong bonding between the companies and stakeholders (Knebel & Seele, 2015).

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Procedures used by Dorel Industries Inc to Report Non-Financial Information
There are certain reports that the business organizations use for the purpose of
reporting the non-financial information. Some of them are company’s annual report,
corporate governance reports, sustainability reports and others. It can be seen in case of Dorel
Industries Inc that the company has published their annual report for the year ended 2017
(dorel.com, 2019). The analysis of the 2017 Annual Report of Dorel Industries Inc indicates
towards the crucial fact that the annual report of Dorel Industries Inc is only used for
disclosing the financial information of the company for the year ended 2017. In addition, the
company has provided the description of some of their business aspects in the annual report
(dorel.com, 2019). The 2017 Annual Report of Dorel Industries Inc does not include any
information on the performance of the company in the non-financial areas such as
environmental performance, sustainability performance and governance performance. This
aspect indicates towards the important aspect that Dorel Industries Inc has not converted their
annual report as a non-financial report for disclosing the non-financial information since they
have only disclosed the financial information of their business in this report. It also implies
that the stakeholders will not be able in gaining any non-financial information of the business
from accessing Dorel Industries Inc’s annual report for the year 2017 (dorel.com, 2019).
Most of the companies prefer to publish their non-financial information through their
Sustainability Reports which is considered as a crucial non-financial report for the
companies. This report includes all the information on the non-financial performance of the
companies (Ioannou & Serafeim, 2017). However, exception can be seen in case of Dorel
Industries Inc due to the fact that the company does not issue any sustainability report for
disclosing their non-financial information. It is a crucial aspect that needs to be considered
for Dorel Industries Inc. Since, Dorel Industries Inc does not provide non-financial
information in the annual report and does not issue the sustainability reports, they have put

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major emphasis on disclosing the non-financial information through their official website
(dorel.com, 2019). It can be seen that Dorel Industries Inc has a different section in their
official website called Sustainability and they have disclosed the non-financial information
on sustainability in this particular section. It can be observed that there are five points under
this section of sustainability; they are Recycling and energy management, Going green,
Creating health lifestyle, Built-in sustainability and Company-wide minimization of
environmental impact (dorel.com, 2019). In this particular section, Dorel Industries Inc has
provided the information of their vital initiatives as well as achievements in these social,
sustainability and environmental areas. Hence, it can be see that Dorel Industries Inc has used
management accounting concept of disclosing non-financial information on sustainability
through their website (dorel.com, 2019).
Governance is considered as another non-financial area for the companies. Earlier
discussion states that Dorel Industries Inc has not provided any information on corporate
governance in their annual reports. However, they have included a section in their official
website named Corporate Governance where they have disclosed all the information on
corporate governance (dorel.com, 2019). It can be seen from this section that Dorel Industries
Inc complies with the corporate governance principles of Toronto Stock Exchange (TSX)
with the aim to establish corporate governance control on their business (dorel.com, 2019).
With the aim to provide the stakeholders with more information, Dorel Industries Inc has
issued certain non-financial reports on corporate governance; they are Charter of Corporate
Governance and Nomination Committee, Charter of the Human Resource and Compensation
Committee, Charter of the Audit Committee, Code of Business Conduct, Disclosure Policy
and Whistle-Blowing Policy. In addition, Dorel Industries Inc has disclosed the information
of their Board of Directors in this section (dorel.com, 2019).

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Conclusion
The above discussion indicates towards the crucial fact that Dorel Industries Inc has
not been able in using the tools of management accounting as means for disclosing the non-
financial information of their businesses in the presence of the fact they do not provide non-
financial information in annual reports and do not publish sustainability report. Instead of
these non-financial reports, Dorel Industries Inc uses their official website for disclosing the
non-financial information of their business. This aspect indicates towards the ineffectiveness
of the company in using the concept of management accounting for disclosing the non-
financial information of their businesses.

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References
Camilleri, M.A., 2015. Environmental, social and governance disclosures in
Europe. Sustainability Accounting, Management and Policy Journal, 6(2), pp.224-
242.
Dorel | Corporate Governance. (2019). Dorel.com. Retrieved 9 April 2019, from
https://www.dorel.com/eng/corporate-governance
Dorel | Sustainability. (2019). Dorel.com. Retrieved 9 April 2019, from
https://www.dorel.com/eng/sustainability
Dorel.com. (2019). 2017 ANNUAL REPORT. Retrieved 9 April 2019, from
https://www.dorel.com/eng/CMS/DOR_AR17_EN_VF.pdf
Ioannou, I., & Serafeim, G. (2017). The consequences of mandatory corporate sustainability
reporting. Harvard Business School research working paper, (11-100).
Knebel, S., & Seele, P. (2015). Quo vadis GRI? A (critical) assessment of GRI 3.1 A+ non-
financial reports and implications for credibility and standardization. Corporate
Communications: An International Journal, 20(2), 196-212.
Lokuwaduge, C. S. D. S., & Heenetigala, K. (2017). Integrating environmental, social and
governance (ESG) disclosure for a sustainable development: An Australian
study. Business Strategy and the Environment, 26(4), 438-450.
Theriou, N. G. (2015). Strategic Management Process and the Importance of Structured
Formality, Financial and Non-Financial Information. European Research
Studies, 18(2), 3.