ACCG 950 - Financial Reporting and Analysis: A Comparative Report

This report provides a detailed financial reporting analysis of Rio Tinto and BHP Billiton, focusing on their Global Reporting Initiative (GRI) reports. It evaluates the purpose of GRI reporting for each company, identifies key stakeholders and their interests, and analyzes the similarities and differences between the reports. The report also critically assesses the quality of information, consistency with GRI standards, and significance for stakeholders. Key areas explored include the reliability, relevance, and comparability of the information presented, as well as the companies' adherence to GRI framework guidelines and the overall impact of GRI reporting on stakeholder understanding of the organizations' financial positions and ethical operations.

Running head: FINANCIAL REPORTING AND ANALYSIS
Financial Reporting and Analysis
Name of the Student:
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Table of Contents
1. Evaluating the purpose or purposes for providing a GRI or IR of the two companies:.........2
2. Detecting the key stakeholders, which will have interest on the report, while explaining
why each stakeholder could be interested:.................................................................................2
3. Analysing and identifying the significance, similarities, and differences between the GRI
report of both the companies:.....................................................................................................4
4.i. Evaluating the quality of information portrayed in the GRI statement of both the
companies:..................................................................................................................................5
4.ii. Evaluating the consistency of the GRI report of both the companies in accordance with
the standards or Framework:......................................................................................................6
4.iii. Evaluating the significance of GRI report for the stakeholders of the organisation:........6
Reference and Bibliography:......................................................................................................8

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1. Evaluating the purpose or purposes for providing a GRI or IR of the two companies:
After evaluating the Global reporting initiative report of both Rio Tinto and BHP
Billiton relatively helps in identifying the critical substantial issues that they highlight for the
stakeholders. The report relatively holds substantial evidence regarding the sustainability
issues that is faced by organisations, which relates to social wellbeing, Human Rights, and
governance. The report presented by Rio Tinto and BHP Billiton relatively describe all the
relevant corporate social responsibilities that is followed by the organisation during the fiscal
year. The Global reporting initiative report directly includes all the relevant financial trends
of the organisation, which relatively allows the stakeholders to understand the current
financial position of the organisation. adequate accounting information related to future
prospects of BHP Billiton and Rio Tinto is adequately depicted in the Global reporting
initiative report published during the fiscal year. BHP Billiton adequately involves all the
relevant information regarding the assets that is owned by the organisation during the fiscal
year, which helps in allowing the investors to understand its current operating capability. On
the other hand, Rio Tinto directly describes all the relevant operations that it has been
conducting during the fiscal year from mining to production. This helps in evaluating the
current position of the organisation where all the responsibilities and actions taken by Rio
Tinto evaluated by stakeholders. The GRI report of both the companies relatively holds all
the risk assessment that is followed by the organisation during the fiscal year to help
minimise the adverse impact of risk involved in their operations (Globalreporting.org, 2018).
2. Detecting the key stakeholders, which will have interest on the report, while
explaining why each stakeholder could be interested:
There is different level of stakeholders who interested in the Global reporting
initiative of BHP Billiton and Rio Tinto. the stakeholders relatively use the information to

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identify the ethical operations which has been conducted by the organisation during the fiscal
year. Stakeholders such as government, suppliers, competitors, managers, customers, and
investors are relatively focused on evaluating the Global reporting initiative of both the
company. BHP Billiton and Rio Tinto relatively falls under Mining industry where the
organisations are responsible for the mining process conducted in Australia and other
countries. This relatively increases the environmental impact they have on the society. The
report directly helps in identifying the level of operations that is conducted by organisations
for fulfilling the guidelines mentioned by Global Reporting Initiative (Riotinto.com, 2018).
Stakeholders such as suppliers and contractor relatively focus on the Global reporting
initiative to understand the current financial position of the organisation. In addition, it also
helps in identifying the relevant ethical measures that is conducted by the organisation during
the fiscal year. The suppliers and contractors relatively evaluate the report to understand the
financial position of the organisation and the legal activities that it is conducting.
Furthermore, the government evaluates the Global reporting initiative report to understand
the environmental measures that is conducted by both the mining companies. This relatively
indicates the measures that is taken by the organisation to minimise the environmental
damages conducted from the mining process (Globalreporting.org, 2018).
The managers and employees utilise the information of the GRI and IR report to
understand the level of operations that is conducted by the organisation. Moreover, the
financial position and the capability to sustain operations is relatively evaluated from the
reports. This mainly allows the managers and employees to understand the level of expenses
that it will continue to conduct for its operations. lastly, the investors relatively use the GRI
and IR report for detecting the level of financial condition that the current organisation is
facing. Furthermore, this is relatively helps in identifying Negative impact from government

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rules that will be imposed on the operations of BHP Billiton and Rio Tinto which might
affect its capability to continue its operations.
3. Analysing and identifying the significance, similarities, and differences between the
GRI report of both the companies:
After evaluating the Global reporting initiative of Rio Tinto and BHP Billiton it could
be identified that they have maximum similarities, as they are from same industry. Therefore,
the GRI guidelines for the mining industry is relatively same, where the overall operations
that is conducted by Rio Tinto and BHP Billiton is adequately evaluated in the report. Report
also consists of all the relevant financial operations of the company and the prospects that
will be conducted to improve its current profitable position. This might eventually help the
stakeholders to understand decisions made by the management in achieving sustainable
growth (Globalreporting.org, 2018).
Both Rio Tinto and BHP Billiton GRI report consist of different types of content,
which is required as per the guidelines. These contents are depicted as community
relationship, protection of the environment, governance integrity, value chain, sustainability
fundamentals, performance data, and Global reporting initiative index. The GRI report
directly has all the relevant information that is needed by the stakeholders of the organisation,
which indicate the operation conducted during the fiscal year. No significant difference that
could be identified between the BHP Billiton and Rio Tinto, as both the company fall in the
same industry which forces them to provide all the relevant information in the GRI report
(Lewellyn & Logsdon, 2017).

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4.i. Evaluating the quality of information portrayed in the GRI statement of both the
companies:
The GRI report quality is relatively essential, as it needs to provide all the relevant
information to the stakeholders of the organisation. Furthermore, the quality of the
information is relatively evaluated on the basis of the following measures.
Reliability:
The information provided by Rio Tinto and BHP Billiton can be identified as a
reliable source as the company has followed all the guidelines of GRI before publishing the
report. This relatively indicates that the information used by the organisation is from reliable
source which indicates the actual operational capability of the company. Therefore, it could
be understood that the reliability factor of the GRI report is relatively high for both BHP
Billiton and Rio Tinto (Ioannou & Serafeim, 2017).
Relevancy:
The GRE report of Rio Tinto and BHP Billiton adequate indicates all the relevant
information regarding the financial performance of the company. The report directly has all
the relevant contents that is needed by stakeholders to understand the operations of the
company and is relevant to the needs of the investors. In addition, the relevancy of the GRI
report is adequately high, as investors are able to understand the level of operations and
productivity that is been conducted by the organisation during the fiscal year.
Comparability:
Both the GRI report of BHP Billiton and Rio Tinto can be compared with other
competitors or organisations, which would eventually help in understanding the financial
position of the company. The compatibility measure is a relatively high as both the

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organisation has effectively utilised the GRI guidelines in preparing the report (Belkhir,
Bernard & Abdelgadir, 2017).
4.ii. Evaluating the consistency of the GRI report of both the companies in accordance
with the standards or Framework:
The GRI report of BHP Billiton and Rio Tinto is a relatively adequate and is in
accordance with the framework, where the operational capability of both the companies can
be identified. The GRI report consist of all the relevant frameworks that is mentioned by the
GRI guidelines to ensure the stakeholders regarding the current financial condition of the
organisation. With the help of GRI framework the organisations are able to enable third
parties to identify the environmental impact on their activities. this type of disclosure
relatively allows the stakeholders to understand the level of operations and its viability in the
eyes of adequate regulators. The organisations also able to disclose their critical impact which
has both negative and positive impact on society. economy and environment. This relevant
disclosure directly allows the stakeholders to understand the level of activities that is
conducted by the organisation during the fiscal year. Hence, it could be understood after the
valuation of Rio Tinto and BHP Billiton GRI report that the company adequately follows the
framework guidelines, while preparing the report on each fiscal year. On the other hand,
Grushina (2017) criticises that companies use manipulative measures while preparing the
GRI report, which reduces the efficiency and viability to portray the actual financial
condition of the organisation.
4.iii. Evaluating the significance of GRI report for the stakeholders of the organisation:
The use of GRI report for the stakeholders of the organisation is relatively high as it
helps in depicting the financial position of BHP Billiton and Rio Tinto during the fiscal year.
This helps the stakeholders not only to understand the current financial condition of the

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organisation but also to detect the ethical operations conducted by the company. the
sustainable measures used by BHP Billiton and Rio Tinto in conducting the operations is
effectively depicted in the report, which allows the investors to understand the continuous
process of their operations. However, if the organisations in the Mining industry does not
comply with the environmental Regulation and use unethical measures in their productive
measures could directly attract penalties from the government. Hence, the stakeholders with
the help of GRI report is able to understand the capability of the company to continue its
operations after complying with the environmental, economic and social obligations (Smit &
Bierman, 2017).

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Reference and Bibliography:
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.
Bendell, J. (2017). Talking for change? Reflections on effective stakeholder dialogue.
In Unfolding stakeholder thinking 2 (pp. 53-69). Routledge.
Domingues, A. R., Lozano, R., Ceulemans, K., & Ramos, T. B. (2017). Sustainability
reporting in public sector organisations: Exploring the relation between the reporting
process and organisational change management for sustainability. Journal of
environmental management, 192, 292-301.
Globalreporting.org. (2018). Globalreporting.org. Retrieved 7 June 2018, from
https://www.globalreporting.org/Pages/FR-BHPBilliton-2017.aspx
Globalreporting.org. (2018). Globalreporting.org. Retrieved 7 June 2018, from
https://www.globalreporting.org/information/g4/Pages/default.aspx
Globalreporting.org. (2018). Globalreporting.org. Retrieved 7 June 2018, from
https://www.globalreporting.org/Information/about-gri/Pages/default.aspx
Grushina, S. V. (2017). Collaboration by design: Stakeholder engagement in GRI
sustainability reporting guidelines. Organization & Environment, 30(4), 366-385.
Ioannou, I., & Serafeim, G. (2017). The consequences of mandatory corporate sustainability
reporting.

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Lewellyn, P. G., & Logsdon, J. M. (2017, July). Global Reporting Initiative G4 Sustainability
Reporting Guidelines: Do They Deliver?. In Proceedings of the International
Association for Business and Society (Vol. 28, pp. 161-172).
Riotinto.com. (2018). Riotinto.com. Retrieved 7 June 2018, from
http://www.riotinto.com/documents/RT_SD2017.pdf
Smit, A. M., & Bierman, E. J. (2017). An evaluation of the reporting on ethics and integrity
of selected listed motor vehicle companies. African Journal of Business Ethics, 11(1).
Sullivan, R. (2017). Valuing corporate responsibility: How do investors really use corporate
responsibility information?. Routledge.