BE150 Issues in Financial Reporting Sample
Ans 1:
a)
Sustainable development can be highlighted as the basic principle of organising for further achieving the human development goals with a closer urge on maintaining the sustainability of the natural systems to provide the ecosystem with proper natural resources and the services of the ecosystem depending on the society. Moreover, the specialists were found to highlight various sustainability indicators playing essential roles in the evaluation of alternatives in defining sustainable development.
Furthermore, the sustainability assessment tool was found to provide the policymakers with relevant do’s and don’ts to reach a sustainable society and the inter-dependability of the sustainable development goals with respective projects (Ebrahimi and Rahmani, 2018).
The triangular model highlighted for sustainable development is found to incorporate core dimensions of sustainability in CSR considering the environment, energy usage, employees, community with customers and products (Dzeawuni, 2020). The concerned dimensions are found to create a strong representation of the multi-dimensionality of sustainability performance within organisations.
Figure 1: CSR dimensions linked to overall customer loyalty
(Source: Influenced by Dzeawuni, 2020)
The above figure highlights the linkage of different CSR dimensions with the customer loyalty levels of organisations. CSR efforts of companies toward employees are found to incorporate employee training guidance on working conditions and general welfare for employees (Aggarwal, 2013).
Companies’ efforts to improve CSR towards the community incorporates donation of products cash and employee allowances for offering different services to support events and activities within the community like funding scholarship sponsoring public health and the employment of students (Albahussain, 2015). Moreover, the CSR dimension toward the environment focuses on compliance with laws and regulations of the environment and the conservation of natural resources (Aggarwal, 2013).
Energy used in CSR incorporates conservation of energy during business operations, disclosure of energy policies and efficient utilisation of waste with product recycling strategies. The efforts of CSR toward customers are conducted through providing high-quality products at competitive prices along with meeting the requirements of customers efficiently.
b)
The company is mainly found to engage and invest in different CSR activities to recruit employees to improve their brand viability in the eyes of consumers and investors along with an in to efficiently manage the risk associated with the current market. In addition to that, CSR reporting also helps ease out the supply chain management with additional chances to save financials and increase capital access and differentiate the firm from its immediate competitors within a specialised market.
Focusing on the CSR reporting maintained by the company KPMG it was found to significantly reduce its emissions by 58% during the financial year of 2020 in comparison to the previous year. Moreover, the company has also focused on establishing its commitment to becoming net zero emissions by the year 2030 (Assets.kpmg, 2021).
Moreover, KPMG was found to promote employee dimensional sustainability through the incorporation of the “Live Savvy Championship” program with the collaboration of environmental behaviour leading the employees to live in a sustainable manner by saving water, reducing carbon emissions and planting trees to have a positive impact on the environment.
In addition to that, Savills company was found to incorporate CSR activities by reducing 36% of the carbon emissions within 2018 and is committed to becoming a need zero carbon business by the end of 2030 (Savills, 2020). In addition to that, the offices were found to invest in energy-efficient appliances to reduce carbon footprints and the plantation of over 5 million trees has been a part of their Woodland creation projects within the UK.
The company was found to maintain high levels of employee sustainability and environmental sustainability going to the discussed CSR dimensions above.
Ans 5:
a)
Narrative reporting can be further described as the incorporation of non-financial information within annual reports of companies to provide a meaningful and broad description of the company’s business market strategy and position along with its performance and future prospects. Moreover, narrative reporting of companies is found to reveal the necessary information required to rely upon the necessary measures undertaken to manage their businesses that are necessarily not recorded within the annual report.
In addition to that, narrative reporting is found to incorporate the strategic report, the chairman’s statement, the director’s report along with the remuneration report from directors and corporate governance disclosures maintained by the organisation within a particular financial period. Moreover, the financial reporting council was found to produce an adequate guide in reporting strategic reports and other requirements of the native reporting along with the results and discussions laid out by the financial reporting lab with the investors to disclose best practices within particular areas.
b)
Narrative report engagement was found to enhance the overall understanding of businesses with improved governance levels and effectiveness of the corporate management within organisations by understanding the depth and breadth of assist information (Hussainey and Al‐Najjar, 2011). In addition to that narrative reporting is also found to improve and enhance the understanding of investors and key stakeholders of organisations.
Companies having effective narrative reporting skills are found to provide investors and their respective stakeholders with clear and deeper insights into the driving value of businesses helping in a clear demonstration of chosen strategy to guide the business forward significantly.
Another major advantage of narrative reporting would be the utilisation of communication strategy and aligned reporting structure as the volatile reported earnings and corporate guidelines of governance become extensive in nature the socially responsible investment is found to become challenging leading to the narrative reporting discipline and cons textual information to be consistent over time and medium of the companies in providing performance insights.
However, there are some significant implementation challenges faced by the companies to incorporate narrative reporting as there are particular information honours like human resources customers brands and marketing with research and development individuals.
However, it has been a significant challenge for organisations to potentially complete the agendas and manage their respective expectations of the overall structure and annual report contents to be finalised and developed in a coherent and fully integrated manner. It is also of vital importance for organisations to meet the exact needs of investors along with having a proper understanding of the major issues affecting stakeholders to gain a comparative advantage over the immediate competitors (Strampelli, 2018).
Therefore, it can be stated that the company should focus on understanding the needs of investors to properly address the same with minimal opportunities provided to their complete details in extracting or stealing their competitive advantage.
References
Aggarwal, P. (2013). Impact of Sustainability Performance of company on its financial performance: A study of listed Indian companies. Global Journal of Management and Business Research Finance, 13(11), 60-70.
Albahussain, S.A. (2015). A suggested Conceptual Agenda for Market Orientation and Corporate Social Responsibility towards the Business Performance of Saudi Industrial Organizations. International Business and Management, 2(2), 16-30.
Assets.kpmg, (2021). UK Corporate Responsibility Report 2020 Available at: https://assets.kpmg/content/dam/kpmg/uk/pdf/2021/02/KPMG-UK-Corporate-Responsibility-Report-2020.pdf [Accessed on: 30/08/2022]
Dzeawuni, W.A., 2020. The Dimensions of Corporate Social Responsibility and Customer Loyalty of Consumer Goods Companies in Nigeria. Available at SSRN 3557813.
Ebrahimi, M., and Rahmani, D. (2018). A five-dimensional approach to sustainability for prioritizing energy production systems using a revised GRA method: a case study. Renewable Energy. doi:10.1016/j.renene.2018.12.008
Hussainey, K. and Al‐Najjar, B., 2011. Future‐oriented narrative reporting: determinants and use. Journal of Applied Accounting Research.
Pwc, 2020. Narrative Reporting Give yourself a head start Available at: https://www.pwc.com/gx/en/audit-services/corporate-reporting/assets/pdfs/narrative-reporting.pdf [Accessed on: 30/08/2022]
Savills, (2020). UK CORPORATE SOCIAL RESPONSIBILITY REPORT 2020 Available at: http://pdf.savills.com/documents/uk_corporate_social_responsibility_report_2020_v2.pdf [Accessed on: 30/08/2022]
Strampelli, G., 2018. The EU issuers’ accounting disclosure regime and investors’ information needs: the essential role of narrative reporting. European Business organization law review, 19(3), pp.541-579.
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