Advanced Financial Accounting - Example

Student Name Professor Name Course Name Date Advanced Financial Accounting: Voluntary Disclosures in Accordance with GRI Initiative GRI Guidelines The GRI guidelines are made up of reporting principles, guidance and standard disclosures that might involve performance tools and indicators. The reporting principles that are directed in the GRI guidelines include materiality, stakeholder’s inclusiveness, sustainability phenomenon and information completeness. Accordingly, there are such principles as balance, comparability, accuracy and reliability (GRI 1). On the other hand, voluntary standard disclosures are supposed to be reflected in strategy and profile of the company, the immediate management approach adopted and the performance indicators that reflect on such information as economic, environmental and societal in nature (GRI 1). It is important to mention that in the course of applying the aforementioned GRI guidelines, the paper examines the applicability of the set rules by both Aurora Energy and Newcrest Mining Limited. Aurora Energy Sustainability Report For this company, the sustainability report covers the financial period between 2010 and 2011. First, the company identifies the numerous stakeholders involved in its day-to-day operations. These stakeholders are identified to be both residential and business-based consumers, distinctive community-based agencies, social-service agencies, the Tasmanian government, the numerous contractors and distinguished suppliers and ombudsman (Aurora Energy 1-54). The company’s employees are also mentioned as immediate stakeholders. The company ensures that employee challenges are attended to in order to provide customers with efficient services and at a reasonable cost. Additionally, the company ensures that the health and welfare of their employee is maintained and improved at all times. The company’s business strategy rests on meeting customers’ immediate needs and also desists from participating in activities that might involve price increases. Some of the extended strategies include continual improvement in supporting customers, implementation of cost efficiencies and immediate productivity rewards in the course of distribution of electricity to the wider society and putting in place immediate effective environmental measures that will help improve environmental issues faced (Aurora Energy 89-111). The report also conforms to the GRI guidelines by presenting a clear and concise review of the entire organization. Thus, the entity is owned by the Tasmanian government authorities. It was founded in 1998 under the Electricity Companies Act 1997. The company is engaged in the production and distribution of electricity in the states of both Tasmania and Victoria. The company is also involved with distinctive separate businesses of telecommunications and provision of the national broadband network structure (Aurora Energy 120-164). Notably, the sustainability provides a clear review on the company’s management approach and governance model. For instance, in cases of vast and complex decision making capacities both the Board and executive personnel are called upon for providing relevant considerations for the entire Aurora activities. The company’s corporate governance is utilized to deliver quality services to shareholders of the company. It is also used for other key functions within the organization that might include employee conduct, customer relationships, health of both employees and immediate stakeholders and any other formidable community-based partnerships. The company’s corporate policies are supervised by both the Board and the Chief Executive Officer (Aurora Energy 120-154). Aurora’s management approach is assumed by both the CFO and Community Services Division. The tow personnel also get support from the company’s Strategy and Corporate Affairs section, Governance Department and People and Culture Divisions in order to formulate and maintain business strategies that are needed for efficient operations (Aurora Energy 155-159). The company’s social performance activities are in line with G3 Guidelines given that it focuses on customer-base. The company is making efficient efforts to meet the immediate needs for its entire customer-base. This should be achieved by improving on customer relationships so that products and services that meet their specifications are met. Furthermore, the company has developed platforms where customer’s immediate complaints and demands are received and analyzed promptly. The two teams that have been assigned customer social responsibilities are the Energy Business Center and the Faults and Operations Team. In respect to the environmental structure and performance, Aurora provides a criterion for measuring the degree of environment participation. This is conducted by matching coverage of company’s immediate performance with the annual Environmental Stipulations that have been created. The company ensures that stringent environmental regulations are adhered to in both Tasmania and the national platform. For instance, the company has formulated the Aurora Green environmental-based policy for purposes of overseeing the company’s environmental performances at all given times. The policies are formulated and maintained by the People and Culture Division together with trained environmental experts. The environmental policies have also been extended to the contractors of the business. Internal environmental audits are conducted often to ensure compliance with the already-laid EMS structures. It is notable to mention that the company has also ensured that the greenhouse gas emissions are put under scrutiny. The company’s makes relevant reporting and disclosures of these gases to the national Department of Climate Change and Energy Efficiency (Aurora Energy 125-149). The principle of materiality as stipulated by the GRI guidelines is also met. The company identifies different energy use initiatives as meeting the proposed material functionalities. The initiatives include elimination of bottled spring-based water to pave way for tap water and reduction of numerous photocopied papers in order to cater for environment. In respect to availability and reliability principle, the company’s sustainability report provides planned capacities that depict projections of demand for electricity in both long-term and in the immediate regulatory regime. Newcrest Mining Limited Sustainability Report The company initiates the report by the provision of the letter from the most senior executive: the CEO. The letter embarks on providing different arenas of challenges facing the business as well as the improvements made by the company over some period of years. The report also reflects on the company’s mission and the compliance of getting to provide relevant and truthful information at all times (Newcrest Mining Limited 11-35). The organizational profile is presented in accordance with the GRI guidelines. The name of the organization is Newcrest Mining Limited. It is located in Melbourne state: Australia. The company’s immediate product and service engagement is placed on mining, pipeline and greenfield models of explorations. The company operates predominantly in Australia, the Pacific and Asiatic region. It has an employee-base of about 19,000 from both within the country and Africa. The future investment projections are developed in both the Cadia East underground mine and Lihir million ounce plant upgrade. The company’s productivity is highlighted to be 2.3 million ounces of gold and 76,000 tons of copper (Newcrest Mining Limited 34-45). The company’s governance structure is only involved with the Board of Directors who formulate and maintains the organizations strategic objectives. The Board of the company also oversees the management issues, sustainability and implementation of checks and balances that are reflected on key people. Governance of the company is improved through constant review of performances made by the different committees and directors of the company. Questionnaires and surveys form the platform for evaluation. Unlike in Aurora, Newcrest ensures that their top-most executives undergo annual scrutiny processes in accordance with the stipulations made on Newcrest Work Performance System (Newcrest Mining Limited 57-89). The company provides distinctive and detailed stakeholder’s involved with the company either directly or indirectly. These stakeholders include shareholders, employees, communities, government and media, and customers at large (Newcrest Mining Limited 77-90). The company’s adopts a materiality approach that expounds on different issues affecting the sustainability-performance efforts of the business. The issues discussed under this review include the economic benefits, health and safety and immediate training and education of staff among others. It also identifies its economic benefits to be the ability to pay-off dividends to shareholders and income tax to the relevant government authorities. The company also engages in provision of direct forms of benefits to the communities through CSR projects (Newcrest Mining Limited 90-96). In respect to the environmental responsibilities, the company operates under the Newcrest Environmental Policy that is conversant with the GRI guidelines. The company’s key responsibility towards the environment is focused on managing water and energy consumption efficiently (Newcrest Mining Limited 66-87). Conducting effective water discharge and waste management approaches as well as reduce noise and dust pollution. The company has also entered into partnerships with different agencies like the BBOP in order to effectively manage effects of wastes on the bio-diversity. Notably, there is a core closure plans made by the company that involves progressive rehabilitation processes and key operations. In respect to the social responsibilities, the company identifies and pays tribute to different cultural diversities and communities. Accordingly, the company identifies a community based standards and regulations upon which it conducts its business activities. This is developed in order to attain mutual benefits and trust amongst the locals. The performance indicators adopted by the firm are involved with provision of grievances that were utilized in resolving issues pertaining to land usage and customary rights attributed to the locals and indigenous people. Identification of the Strength and Weaknesses of their Disclosures For both the companies the disclosures have been conducted effectively. The reports have managed to present the issues relating to environmental, social and economic responsibilities in a fairer manner. However, for Aurora, materiality principle has not been fully covered. It should also be noted that there has been significant differences noted in the manner for which responsibilities are presented and disclosed. This is dependent greatly upon the form of business undertaken. My key recommendation for these businesses is that they make effort to formulate a step-by-step GRI check list that will ensure no single item is left behind. The businesses should also be conversant with the reporting needs of the time so that principles of balance and reliability are construed in the preparation stage of the sustainability report. Additionally, Aurora Energy should borrow a leaf from other organizations so that it can identify ways of reflecting productivity rates for stakeholder’s analysis. Works Cited Aurora Energy. Sustainability Report 2010-11. Retrieved from http://static.globalreporting.org/report-pdfs/2013/29af34320823386dec3d8746b07a19ca.pdf GRI, Orientation to the GRI Guidelines. 2009. Retrieved from https://www.globalreporting.org/reporting/guidelines- online/G31Online/Pages/OrientationToTheGRIGuidelines.aspx Newcrest Mining Limited. Sustainability Report 2012, Retrieved from http://static.globalreporting.org/report-pdfs/2012/db9854e03615a30e965b550a49a5d62a.pdf Read More