Social Accountability in Accounting

Question: Case Study: Social Accountability in Accounting. Answer: Introduction This study deals with issues in social accountability. In order to identify issues, it is necessary to drawing comparisons with two different companies of same industry listed in Australia Stock Exchange (Kothari and Barone 2011). The company selected are Caltex Australia Limited and Austex Oil Limited. Both the companies belong to oil exploration. Caltex Australia Limited is the parent company of Caltex Australia Group. This business entity is listed in Australia Stock Exchange. The main activities of Caltex Australia are purchase, refining as well as distribution and marketing for the same. On the other hand, Austex oil limited is one of the oil and gas producing company operating in Oklahoma and Kansas (Pahler and Mori 2012). This company raises capital for developing oil and gas leases in USA. Discussions On comparison, it is noticed that both the companies listed in Australia Stock Exchange. Caltex Australia is operations in Australia while Austex oil limited operations in USA. Both the companies belong to the same industry but involves in different operations at the same time. Caltex Australia involves in purchase, refining as well as marketing of petroleum products. On the other hand, Austex Limited involves in exploration of oil and gas selling of end products in an overall manner (Jeter and Chaney 2012). Austex does not deal directly with the end user in any firm. After reviewing at the accounting policies of Caltex Australia, it is revealed that it gets compiled with environmental provisions of the company. As far as necessary accruals are concerned, it is adjusted with necessary information as well as circumstances in the near future. It involves recovery from third parties and accounted for future analysis purpose. Most of the cost incurred after compiling with environmental r egulations as well as on-going maintenance in monitoring of expenses in incurred expenses (Jeter and Chaney 2011). Austex Limited meets the environmental regulations for extraction as well as use of natural resources. It includes environmental expenditure as incurred by the company preventing future contamination as well as leading improvement in environmental safety. It increases the level of efficiency of the existing assets as well as capitalization of cost as far as possible. In case of accrual, it reveals booking of any environmental liabilities for estimated future cost in the most appropriate way (Hoyle, Schaefer and Doupnik 2011). It is important to understand the fact that company poses own health as well as safety policy. Policy of the company is duly approved by OHS and Environmental Risk Committee. This particular Committee requires Caltex in providing safe as well as healthy workplace for the people. OHS committee mainly aims at motivating company in operating adverse affect of health and safety (Hoyle, Schaefer and Doupnik 2011). It engages neighbours as well as customers and public for the same. It is advisable for the company in involving in health and safety measures as per embedded business planning process. It entrenches culture in and within business organization at the same time. Ethics in accounting concerns with making presentation as well as disclosure of financial information regarding activities. As per the financial statement, companies prove important for the stakeholders like shareholders, lender as well as banks and financial institutions. Ethics in accounting renders reliable financial information in the financial statement in regards with people for undertaking financial decisions in an overall manner (Fischer, Taylor and Cheng 2012). Most of the financial accounting concerns with matters relating maximization of shareholders wealth. It mainly aims at helping distant as well as remote financial markets and many others. Financial accounting has no obvious social as well as environmental interest that needs consideration in the near future (Fischer 2011). Financial Highlights On comparison with both companies, it reveals sales revenue of Caltex at $24.6 million that was ahead of Austex at $16.9 million. Hence, this is not one of the major factors in judging performance of the company. As far as gross profit is concerned, Austex Limited comes around 70% and Caltex at 7%. This reveals that Caltex is 10 times of Austex GP ratio in all the forms. There is also difference present in the primary activities of the business organization. Expenses of Austex Limited is considered on the higher side in comparison with Caltex Limited (Dicksee and De Montmorency 2012). After making comparison on net profits, Austex Limited went into losses for around $ 1.1 million. On the contrary, Caltex Limited has some profits amounting to $528k. Conventional financial accounting mainly gives rise to cause harm to society as well as environment for the same. Profits of the companies are increasing due to inevitable expense as in case of social as well as environmental damage for the same. Caltex limited tries in stopping for such abusive practices in the near future (Beams 2011). Caltex Limited focuses ways in participating in Commonwealth Energy Efficiency Opportunities Scheme as well as reported under National Greenhouse Energy Reporting in any form. It takes forms under carbon disclosure projects in an overall manner. It requires participation of both the companies for addressing issues regarding social responsibility as a whole (Beams 2012). ISO 50001 reveals Energy Management It mainly helps organization in saving money as well as becoming energy-efficient for the same. ISO mainly aims in providing different guidelines in conservation of resources and tackling with the climatic change for the same. ISO varies through energy management systems that help in supporting organization in all sectors for energy efficient scheme (Baker 2011). ISO stands for International Organization for Standardization. Austex Limited expects in increased oils and natural gas exploration. This company continues in developing new wells in form of intention for growth purpose. It considers with vision of the company in acquisition of capital from public at the end of the year (Kothari and Barone 2011). It is the organization that helps in providing tools in managing as well as tackling global challenges in modern world. ISO aims at working for attainment of sustainable development for providing with resources in meeting present requirements. It should not compromise with ability for future generations in meeting own needs. ISO 14000 deals with environmental management systems. It aims at providing tools for helping in improving environmental performance as well as control over environmental impact for the same. It enables providing framework for setting up effective environmental management system (Kothari and Barone 2011). Management, employers and stakeholders relies upon ISO in case of environmental impact for measuring as well as bringing improvement in the near future. Benefits of ISO 14001 include reduced cost of waste management as well as savings in consumptions of energy and materials. It involves in lower distribution costs as well as improved corporate image in and among regulators, customers as well as publics for the same. Caltex Limited registered under ISO 14001. As per the company annual report, it involves in environmental responsibility paper manufacturing in case of using environmental management system. ISO 26000 aims at providing necessary guidelines for companies in operating in a n effective and social ways. It needs to follow guidelines as well as act ethical and transparent ways for the same. It should contribute with company health as well as wealth of the society as a whole. ISO 50001 provides framework ascertaining various requirements of the organization. It helps in developing policies for ensuring more efficient uses of energy in an overall manner. It aims at fixing targets as well as objectives in meeting policy in the most appropriate way. It makes use of data in better form for understanding as well as making decisions about energy usage. It establishes ways for measuring results as well as reviewing the policies for designed works. It is continuously improves as energy management tool for future analysis purpose. In the recent Compeitive world, organization should plan in reducing expenditure. Energy considers as one of the major sources used by company in converting raw materials into finished goods for the same. It makes use of energy management systems for planning ways in cutting down energy expenses as far as possible. It provides beneficiary returns from the point of view in financial as well as social perspectives (Jeter and Chaney 2012). It helps companies in conservation of resources as well as tacking climatic changes in the most appropriate way. Conclusion From the above analysis, it is interesting in indicating the issues regarding social accountability faced by business organization in recent world. After considering above points, it is important to look after the financial state of both the companies as well as ISO standards applications. Caltex Australia Limited standards prove better in comparison with Austex Limited in every form. Caltex Limited poses strong financial background as well as establishes in Australia for more than 100 years. It has created many convenience stores as well as reaches the ultimate customer. It satisfies the needs as well as makes the necessary changes in the accounting policies in an overall manner. Caltex Limited has registration under ISO 14001. It helps in meeting up corporate social responsibility in accordance with high accounting standards. Caltex Limited is more profitable business in comparison with Austex Limited. Reference List Baker, R. (2011).Advanced financial accounting. New York: McGraw-Hill Irwin. Beams, F. (2011).Advanced accounting. Upper Saddle River, NJ: Pearson Education. Beams, F. (2012).Advanced accounting. Boston: Pearson. Dicksee, L. and De Montmorency, J. (2012).Advanced accounting. London: Gee. Fischer, P. (2011).Advanced accounting. Mason, Ohio: South-Western. Fischer, P., Taylor, W. and Cheng, R. (2012).Advanced accounting. Mason, OH: South-Western Cengage Learning. Hoyle, J., Schaefer, T. and Doupnik, T. (2011).Advanced accounting. New York: McGraw-Hill Irwin. 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