Report on Accounting Issues: Analysis of CSR Limited Challenges

This report analyzes the accounting issues faced by CSR Limited, an Australian industrial company. It examines the impact of corporate social responsibility (CSR), ethical and legal considerations, environmental concerns, and employee benefits on the company's accounting practices. The report highlights issues related to GRI standards, ethical violations, conflicts of interest, environmental cost calculation, investment appraisal, and the provision of employee benefits. It also discusses the theoretical frameworks underpinning these issues, such as contracting theory and capital investment theory. The analysis concludes with recommendations for CSR Limited to improve its accounting practices and address the identified challenges. Desklib offers a range of resources, including past papers and solved assignments, to support students in their studies.

Accounting
CSR Limited
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Accounting 1
Executive Summary
The rise in the use and complexity of the accounting computation has been a witness with the
issues that are majorly faced by the company. The purpose of the report is to analyse the theories
and concepts of the accounting that are applied to the selected company that is CSR limited. The
report includes the major issues which affect the accounting of the company in the market. The
accounting of the company is not only limited to the computation but it also includes the impact
on the accounting elements of the business. The major issues which are discussed in the report
include corporate social responsibility, ethical and legal issues, environmental issues and
employee benefits issues.

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Contents
Introduction......................................................................................................................................3
Background of company..............................................................................................................3
Corporate social responsibility........................................................................................................4
CSR Limited Liable for Corporate social responsibility.............................................................4
CSR Issue affect Accounting.......................................................................................................5
Ethical and legal issues....................................................................................................................6
Penalties.......................................................................................................................................6
Conflicts of interest......................................................................................................................7
Environmental issues.......................................................................................................................7
Calculation of cost.......................................................................................................................7
Investment appraisal....................................................................................................................8
Employees benefit...........................................................................................................................8
Employee benefit Issues affect accounting of company..............................................................9
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

Accounting 3
Introduction
The aim of the report is to determine and analyse the current theories and model in accounting
and analysing the way these theories are applied to the allocated situation. The situation that has
been discussed over here is the major accounting issues which are faced by the selected
company. The company that has been selected for assessment is CSR Limited who is dealing
with the accounting issues. The issues that are majorly focused in the report include CSR
(Corporate social responsibility), ethical and legal issues, environmental issues, employee’s
benefits issues and others that can affect the accounting of the company. All these issues with
their effect on the company are discussed in the report. In the end, the recommendations to the
company related to the accounting issues are stated that can help the company to perform their
accounting in an effective manner.
Background of the company
CSR Limited is one of the major Australian Industrial companies who is producing the building
products and have the 25% share in the Tomago Aluminium smelter that is located near to the
Newcastle, New South Wales. The company came into existence in the year 1855 and it is
considered as one of the oldest manufacturing companies. In the year 2012, the company said
that it has approx. 3,600 employees and reported an after-tax profit of $90.7 million. The area
where the company is offering their services includes Australia and New Zealand. The company
include different brands like Bradford, Himmel, Viridian, Hebel and many others. Further, the
report covers the major accounting issues which are faced the company.

Accounting 4
Corporate social responsibility
CSR (Corporate social responsibility) is a self-regulating business model that helps the company
to become socially accountable to itself, its stakeholders and public. It is essential for every
company to understand their responsibility towards CSR and to accomplish that so that they can
manage their business operations effectively (Trotman & Carson, 2018). Corporate social
responsibility shows that the each and every company who is performing their business
operations is liable to work for the benefit of the society.
CSR Limited Liable for Corporate social responsibility
CSR Company is liable for bringing the improvement in the society because this has been
evidence that Industrial companies generally affect the environment. The company contributed to
pollution in the environment which directly and indirectly affects society. Further, the building
products require the maximum utilization of the resources which affect the resources of the
communities and society that are living in Australia. Thus, this shows that the CSR limited
company need to take required steps to improve and bring the welfare in the society. Moreover,
the building products also require the use of land and related forest products while performing
their business operations.
CSR limited directly or indirectly affect the environment and their activities perform the work
that can affect the livelihood of the communities and the society in Australia due to which they
become the liable to the society (Hirschey, 2016). Moreover, the company is dependent on the
society for the work or operations which is performed by them due to which they remain liable
for the society.

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CSR Issue affect Accounting
The issue which is majorly faced by the company is related to the GRI Standards. GRI standards
are used by the company while preparing the CSR reporting for the company. They provide a
Sustainability Reporting Framework ‘of which the Sustainability Reporting Guidelines are
included that provide the guidelines to the company for the disclosure of their sustainability
performance and also offers the stakeholders appropriate information. It majorly includes the 11
principles which are required to be followed by the company which include suitability,
relevance, accuracy, comparability, transparency, clarity and context. The report presented by the
company includes all these principles and company has followed by it is not supported in the
report presented by a company which affect the investors’ interest in the company (Gitman,
Juchau and Flanagan, 2015).
CSR limited has also taken different initiatives with the motive to bring the improvement in the
society. This includes the development of enhanced services and new products with the use of
new technology. Further, the building organic grown ideas are brought by the company with the
use of the research and development with the lean startup methodology. This has been found that
CSR limited company has contributed to society, environment and other factors.
All these initiatives and programs which are considered by the company creates the accounting
of the CSR limited because every company needs the amount which the invest for the welfare of
the community and society. This shows the theory of capital investment in which the funds are
invested in a form or enterprise with the purpose of accomplishing its business objectives. This
investment can leads to the loan on the company or they need to pay the amount from a profit of
the company. Once the company invest the amount in the CSR initiatives then they will not
invest that amount in the other projects which will lead to the opportunity cost loss of the

Accounting 6
company (CSR Limited, 2018). Though, this investment of the company can also support the
company in the positive manner which includes the rise in the value of shares of CSR limited
because the society will value for the company and they will make use of the products and
services that are majorly offered by the company.
In addition, the issue of CSR activities can affect the amount of dividend that the company needs
to the pay to the shareholders of the company because the expenses of the company for
maintaining the sustainability will increase which will definitely create the impact on the
company (Sedláček, 2016). Further, the company is seeking for the land but is not able to get the
approval because of community and society living at the place which will affect the company’s
accounting as they won’t be able to make the appropriate profit out of it.
Ethical and legal issues
Ethical and legal elements play a vital role in the organisation and CSR limited company face
different ethical and legal issues which affect the accounting of the company. This issue is
supported by the theory of contracting. In this theory, the organisation is significant as the legal
nexus of contracts. Moreover, ownership and control of the company are separated and
contractual managers are appointed by the CSR limited with the motive to form the legalised and
ethical relationship between the customers. CSR limited to ensure that they make use of the
managerial and debts contracts which are used with the motive to effectively manage the
relationships (Pilbeam, 2018). The theory helps the company in making a strong relationship and
this legal aspect prevent the company from different issues. There is a number of ethical and
legal issues which are faced by the company and these are given below: -

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Penalties
Penalties include the violation of the different accounting ethics laws that has increased among
the companies. This has been found that CSR limited company has set a code of legal and ethical
regulations which are required to be followed by the company (CSR Limited, 2018). Though, the
CSR employees are not able to follow the guidelines effectively due to which they face penalties
which majorly include the termination of the employees in which the company don’t keep any
relationship with the companies.
Conflicts of interest
CSR limited company is dealing with the different brands at the time due to which they face the
conflicts of interest as the issues. The legal allegations and arguments are stated by one company
on other which leads to the rise in conflicts and that somewhere involve CSR Limited due to
which their goodwill get affected. The issue takes place when every party starts thinking about
them.
Environmental issues
An environmental issue also leads to an impact on the accounting activities that are undertaken
by the company. The accounting that is related to the environment is known as environmental
accounting which is a tool that combines the financial implications of the issues related to the
environment in the financial management systems of the company (CSR Limited, 2018). The
environmental activity contributes in the effective decision making of the company but CSR
limited is dealing with different issues which include: -

Accounting 8
Calculation of cost
This has been found that CSR Limited company share price is considered as the worst
performing stock in S&P/ASX 200 (Index:^AXJO) (ASX: XJO) index in the year 2018,
November. The prices of a stock are not appropriate because of the issues which are dealt with
by the companies (Lau, 2018). The company is dealing with the losses due to which they share
prices are not performing appropriately. This shows that the company is not able to conduct the
proper calculation of the cost that they will be bearing in their operations and project investment.
The estimation of the cost will help the company in reducing the number of expenses done by the
company by taking proper steps. The appropriate calculation is lacking within CSR Limited and
this leads to the rise in the numerous issues which leads to the loss of the company. Further, the
stock creates an impact on shareholders’ interest in the company which is also considered as one
of the biggest loss of opportunity for CSR limited.
Investment appraisal
CSR limited working environment shows that they make the investment in the different
operations and projects which requires a huge amount of capital (ICAEW, 2018). The investment
appraisal is the issues for the environmental management accounting as it requires huge
expenditure which will negatively create an impact on the working operations of the CSR limited
company.
Employees benefits
In the competitive world, every company ensure that they offer numerous benefits to the
employees at the workplace which can be related to the monetary and non-monetary terms. CSR
limited to ensure that they motivate their employees and value them. This is evident that

Accounting 9
company involves the structured lean start-up programs so that the employees can take the new
ideas for the business through an inclusive and the new team environment that are supported
with the resources from CSR and skills and knowledge.
CSR Limited Company offers the competitive remuneration, salary packaging, incentive plans,
employee discounts, employee reward plans, immediate recognition rewards, study leave and fee
reimbursement and many other facilities are provided by the company to their employees who
are associated with the company and working with them (ACCA, 2018). The benefits like
rewards plan include the facility of the $1,000 worth of CSR limited company shared to their
employees at no cost. Further, the employees have the opportunity to get the incentive depending
on the short term incentive plans based on the performance of the individual and company. In the
remuneration, the company offers Novated motor vehicle leases to their employees on leases
(CSR Limited, 2018).
Employee benefit Issues affect accounting of the company
CSR limited company is dealing with the different issues in accounting related to the employee's
benefits which are discussed below: -
Computation of employee benefit
It has been done that there are short term employee benefit and long term benefit which are
calculated by the company. CSR limited face issues in the calculation of the long term employee
benefit because it includes the calculation of the deferred compensation which is difficult to be
done. This has been found that the deferred compensation is paid twelve months or after the end
of the period in which it is earned. Further, the company also finds the issues in the profit sharing
and bonuses payable as it is based on the services which are provided by the employees within

Accounting 10
the CSR limited. These computations require an expert in accounting who can support the
accountants of the CSR limited in conducting the calculation of the employee benefit for the long
period of time (Sessoms, 2018). This is one of the major and emerging issues which is faced by
the company in accounting.
Change in the benefit offerings
Changes in the benefit offerings of the company are one of the issues which are faced by the
CSR limited company as they want to bring the changes in the benefit offering but it requires to
bring the changes in the numerous laws and regulations. This leads to the issues for the company
because this will also affect the accounting of the company because the new benefit offering
needs the new computation. Though, there are a different number of issues due to which the
employers like CSR limited bring the changes in their employee benefits offering.

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Recommendations
This section includes the recommendations related to the issues which are faced by the company.
It is suggested to the company to take the following actions which help them in improving the
operations and there will be less impact on the financial accounting.
 It is suggested to the company to promote the sustainability and CSR activities that are
conducted by the CSR Limited as this will bring the improvement in the goodwill and
can contribute in improving the value of the stock which is affected.
 The company should appoint a legal and ethical advisor who can contribute in reducing
the issues which are faced by the company.
 It is suggested to the company to appoint the accounting expert who can easily compute
the elements of the employee benefit as this is the way through which impact on
accounting will reduce.
 Further, it is suggested to the company to apply the agency theory which helps in
protecting the interest of the agents and principles that are aligned with the same.