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AFM 182 Final exam > Chapter 5 > Flashcards

Chapter 5 Flashcards

1
Q

What is corporate social responsiblity?

A

Its a concept that considers a business should look beyond its ‘stakeholders’ when making decision

+ It also encompasses the company going beyond just making profit

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2
Q

What is the Pyramid of CSR

A

It had four main elements (its just a model)
1. Economic - (before a business can do more it needs to be profitable)
2. Legal - a company has a legal responsibility to follow rules and regulations
3. Ethical - Has a responsibility to act more ethical and moral
4. Philanthrophy - Its responsible o give back to the society

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3
Q

What are the pros of CSR

A

Pros:
1. Easy to understand
2. Simple message
3. emphasizes profit

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4
Q

and cons? (CSR)

A
  1. Should ethics be at the top
  2. Businesses might claim to follow CSR when they don’t
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5
Q

What is the TBL

A

It explains how companies should focus on not just profit but also

  1. People (social)
  2. Planet (environmental)

Concerns

It aims to look at the financial, environmental and social performance of a business over time

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6
Q

Pros of TBL

A
  1. Encourages businesses to think beyond profit
  2. Encourages CSR reporting
  3. Support the measurement of envioermntal impact
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7
Q

Cons of TBL

A
  1. Not an overall useful measure of business performance
  2. Hard to measure people + plant
  3. Not legal required
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8
Q

What is ESG

A

Refers to companies measuring three factors (environmental, social , governance) both for their sustainability and ethical impact of a business or company

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9
Q

What does the E stand for in ESG

A

Enviormental

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10
Q

What is large part of E

A

A big part is climate change

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11
Q

What is climate change?

A

It refers to the global temperatures rising

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12
Q

Why are a lot of companies going net zero?

A

Net zero refers to which the greenhouse gases going in the atmosphere are balanced by removal out out of the atmosphere.

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13
Q

What are some companies that are going ‘net zero’?

A

Companies such as ‘lego’

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14
Q

What is ‘greenwashing’

A

Greenwashing refers to companies spending money to perceive themselves as environmentally friendly but are not

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15
Q

Examples of companies who greenwash?

A

Fiji Water , Volkswagen

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16
Q

What is a ‘provision’?

A

It’s a liability that exits however there is uncertainty about both the

  1. Timing
  2. Amount of future expenditure.
17
Q

When does a company record its provision?

A

1) an entity has a present obligation as a result of a past event;

2) it is probable that an outflow of resources (e.g. cash) will be required to settle the obligation; and

3) a reliable estimate can be made to understand the amount of the obligation.

18
Q

What if these conditions are not met?

A

If these conditions are not met, then no provision is recognized and instead a contingent liability is disclosed in the notes to the financial statements.

19
Q

What is a ‘contingent liability’?

A

It’s a possible obligation that arises from past events.

20
Q

What is the journal entry for a Probability liability?

A

Dr. Provision expense
Cr. Provision Payable

Dr. Provision payable
Cr Revenue (to adjust)

21
Q

What is a ‘decommissioning provision’?

A

Its them calculating the present value of cash outflow due to close mines and spending money to restore the enviorment

22
Q

What is an ‘organizational culture’?

A

Its a collection of

  • Values
  • Expectations
    -practices

That guide and inform actions of all its members

23
Q

What does “s’ stand for in ESG

A

Social

24
Q

What does the ‘G’ stand for?

A

Governance

25
Q

What does ‘good corporate governance mean”

A

Having a strong tone at the top as they lead by example

26
Q

What do a lot of companies follow

A

GRI

27
Q

What is GRI

A

Its a global reporting initative that helps businesses take responsibility for their impacts by a providing a ‘global’ common language to help communicate those impacts.

28
Q

Explain HOW IFRS tried to make a sustainability reporting standards.

A

GRI and ISSB

29
Q

What is ISSB made up of

A

CDSB + VRF

30
Q

What is VRF made up of?

A

IRF and SASD

AFM 182 Final exam (11 decks)

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