Accounting Theory Application and CSR Issues: Commonwealth Bank Report

This report analyzes the Commonwealth Bank of Australia's struggles in fulfilling its corporate social responsibility (CSR) obligations. It identifies how specific accounting theories and concepts, particularly the stakeholder theory, influence the bank's ethical conduct and societal impact. The analysis focuses on how the bank's application of stakeholder theory affects its relationships with various stakeholders, including customers and the environment. The report highlights specific issues, such as problems with ATM facilities and EFTPOS machines, and their implications for CSR performance. It argues that the current accounting theories applied by the bank are insufficient to address its CSR needs, leading to misleading corporate governance practices. The report references relevant academic sources to support its arguments, aiming to provide a comprehensive overview of the bank's CSR challenges and their relationship to accounting theory.

ACCOUNTING THEORY
AND ISSUES

TABLE OF CONTENTS
MAIN BODY.............................................................................................................................................3
REFERENCES..........................................................................................................................................4

MAIN BODY
The Commonwealth Bank of Australia has been struggling significantly to fulfil its
corporate social responsibility and position its brand as one which is working for the welfare and
development of the society. These issues related to the compliance of its social responsibility and
duties has been arising in the organization due to following some accounting theories and
concept that are not in sync with these requirements towards the society. The specific accounting
theories have its separate norms and the disclosure policies that affects the ethical code of
conduct that the business urges to follow to maintain the trust and loyalty in the market.
The Commonwealth Bank of Australia has been following the stakeholder theory of
accounting whereby it ensures that the fulfilment of the societal interests and duties towards the
environmental protection are met but in respect of the local communities where its business
operations are undertaken (Freeman and Dmytriyev, 2017). This accounting concept forms part
of the overall scope of the corporate social responsibility for which the company stands
accountable in front of the society. The primary focus of the stakeholder accounting theory is
that it shall be performing for building effective relations and creating value for the stakeholders
of the business. Moreover it can be assessed that CSR has a wider approach towards the ESG
which environment, social, governance activities.
The rankings and graph that are showing the contributions and the initiatives taken by the
bank in respect of social welfare are poor and less striking to attract the new potential customers
and investors to the business. The arena of these developmental activities like donations,
financing education, expertized banking services etc. have been evidently observed in the area
where the potential customers, business presence and value creation opportunities for the
business stakeholders is there. With the objective of value creation and satisfaction of the various
stakeholders of the business it can be assessed that the company is facing lots of issues pertaining
to the code of conduct and ethical practices in the business (Theodoulidis and et.al., 2017).
Recently the company has been facing severe issues in relation to the ATM facilities
provided to the customers in terms of being hacked, information leakages, security breaches etc.
Also the bank has been significantly contributing to the storm affected areas in Australia by
providing them with the emergency assistance services. These services were in respect of the
fulfilment of the stakeholder theory of accounting focusing on building better relations and
generating of the customer value (Fernández-Guadaño and Sarria-Pedroza, 2018). Another major
issue that was affecting the performance of the banking business was regarding the EFTPOS
machine which is electronic fund transfer at the point of sale. There were complications in this
service as well due to the outrages of machines that are supporting the operations of the business.
It was observed that these accounting theories that were applied in the banking business
of Commonwealth Bank of Australia were not sufficient in response to the corporate social
responsibility and due to this there are misleading corporate governance practices. This has built
value for the stakeholders but has affected the positioning of business in the society.

REFERENCES
Freeman, R. E. and Dmytriyev, S., 2017. Corporate social responsibility and stakeholder theory:
Learning from each other. Symphonya. Emerging Issues in Management. (1). pp.7-15.
Theodoulidis, B. and et.al., 2017. Exploring corporate social responsibility and financial
performance through stakeholder theory in the tourism industries. Tourism Management. 62.
pp.173-188.
Fernández-Guadaño, J. and Sarria-Pedroza, J. H., 2018. Impact of corporate social responsibility
on value creation from a stakeholder perspective. Sustainability. 10(6). p.2062.