Regarding to corporate reporting

Question 1

To conform to what other companies in other countries were doing, Australian-based companies engaged in the activity of generating stand-alone corporate social reports as early as in 1990s. In the beginning, information related to environmental and social performances was only provided on a voluntary basis within the annual reports and, in fact was only focused on being self-laudatory. However, going into the 1990s, there was a standardised framework for environmental performance reporting that went ahead to improve on the exciting reporting guidelines that had been issued on an international platform. a good example are the mining-based companies that engaged in the generation of stand-alone environmental reports even in cases where no pieces of legislation had been offered to commit them into doing so. In essence, there were forms of environmental reporting standards that were launched in Australia within that particular period. Notably, Deegan (2012) ascertains that while the concept of environmental reporting played a key role in changing the manner for which conventional approach impacted on the financial performance, a significant shift was witnessed in the 1990s. At this specific period, most companies in Australia commenced with the generation of information related to their respective social performance like the way they engaged in supporting surrounding communities’ projects, employee training initiatives as well as support for the Aboriginal and other indigenous people in the country, while a substantial number engaged in the production of stand-alone social reports.

Companies continue to engage in the notable social and environmental-based disclosures for different reasons. It is noted that corporations’ managers embark on generating stand-alone reports as a reaction to legal requirements; others feel that it is economically rational and that there is a significant set of economic gains that emanates from disclosures of such reports since it might be used to counter a distinct set of associative costs (Blacconiere & Patten, 1994). Research indicates that most managers are now inclined towards production of these stand-alone reports since they perceive that the organisation for which they manage has accountability duty to numerous stakeholders in the manner for which it utilises environmental resources that have been permitted for its exploration purposes (Blacconiere & Patten, 1994). It is noted that there is a high likelihood that in this period social reporting is expected to increase in leaps and bounds amongst corporation just in the same manner for which environment-consciousness became a fundamental reporting concept in the early 1990s. The current knowledge for which social accounting is based on ascertains that a corporation indeed has a different set of stakeholders. Consequently, for most of these corporations that have adopted the generation of stand-alone social accounts, it is noted that stakeholders’ expectations that are acquired through a distinct manner of consultation frameworks, which are being employed to steer through the entire social reporting procedures as a whole (Blacconiere & Patten, 1994). It is important to note that a failure to conform to the specific community-based requirements can result to distinct level of implications for the future survival of the organisation as a whole; this is despite its efficiency in the utilisation of financial resources at hand.

References

Blacconiere, W., & D. Patten, 1994, “Environmental Disclosures, Regulatory Costs and Changes in Firm Value”, Journal of
Accounting and Economics, vol. 18, pp. 357-77.

Deegan, C. 2012. Australian Financial Accounting, 7th Ed, Irwin McGraw-Hill. Australia.