Ask Accounting Basics Expert

Sustainability and Management Accounting Assignment

Fortune WizardInsurance has recently set up an internal information system to improve socialand environmental practices within the company. The company has its head office in Melbourneand offices in all capital cities and every regional city with a population of more than 50000people. One of the underlying principles of the company is to be socially and environmentallyresponsible. This principle has been in place for many years, dating back to the firm's founder,Jeannette Dai, who felt that she would like to contribute to society rather than simply maximisingprofits.

The company is a major contributor to charities, particularly those that focus on the homelessand the poor. It actively promotes environmental management in all of the company operations. Itsponsors a program that provides scholarships to disadvantaged students to allow them to attenduniversity, and it is proud to offer employment in the company to long-term unemployed and thepoor. Each year it publishes a sustainability report that summarises its achievements across eachareaof performance.

Over time these activities have become a marketing strength of Fortune Wizard. The social andenvironmental stance taken by the company has attracted many customers to the company. Listedon the Australian Stock Exchange in 2001, the company has also become a preferred investment ofethical and green investment funds.

The mission statement of Fortune Wizard states that it will aim to:

• Support employees in achieving their personal and career goals.

• Act in a socially responsible way when dealing with insurance clients and the generalcommunity.

• Promote a better social and physical environment for the world.

However, the current chief executive officer, Sylvia Trott, thinks that the firm has becomecomplacent and is resting on its past achievements. She is concerned that the firm has built up areputation for good social and environmental practices but is not 'walking the talk'. There is somelevel of discontent among employees about the way that management treats staff, and this isimpacting on employee satisfaction. There have also been negative reports in the media of itstreatment of businesses in Phuket and Langkawi that were damaged in the December 2004tsunami. The reports claim that the company has tried to minimise the amounts paid to thesebusinesses by strictly applying clauses in the insurance contracts that cover earthquake damagebut not flood damage.

In 2004, the company's net profit rose by 15 per cent to $173 million on an asset base of $1,235million. This is the third consecutive year of increased profits. Earnings per share were 62 cents, andthe market value was $5.40 per share. The board is concerned that Fortune Wizard makes a loss on itsinsurance business, while its investments yield a strong return and are the main reason for theincrease in profitability. Its investment portfolio includes shares in BHP Billiton, Qantas, Telstra andJames Hardie Industries.

The board adopts a sustainability approach to viewing its performance and uses the followingkey performance indicators to assess company performance:

Financial:

• Net profit.
• Gross insurance premiums.
• Return on investment.

Economic indicators:

• Policy, practices and spending on local suppliers.
• Procedures for hiring local staff.
• Development projects primarily for public benefit.

Social indicators:

• Employee satisfaction ratings.
• Percentage of women in the top three tiers of management.
• Number of indigenous employees.
• Customers' ethical ranking of sales staff.
• Number of staff hired who were previously unemployed teenagers.

Environmental indicators:

• Tonnes of paper recycled per annum.
• Percentage reduction in electricity usage.
• Litres of fuel per dollar of sales.

Required:

problem1) describe what is meant by sustainability reporting and why a publicly listed insurance Company like Fortune Wizard may adopt this approach.

problem2) Consider the list of key performance indicators used by Fortune Wizard. describe how these could be used to help achieve the mission.

problem3) Suggest alternative performance measures that could be included in the performance measurement system to assist Fortune Wizard to achieve its mission.

problem4) prepare a report to the chief executive officer describeing what steps she can take to encourage staff to behave in a way that supports sustainability. Specifically, describe to her how the performance measurement system could be used in a balanced way to support the achievementof the company's goals.

Word Limit 2000 words

Take note of the following:

• Make sure that you reference any quoted material using APA Style.

• Always put quoted work in “inverted commas”

• Do not submit your Declaration front sheet with your electronic copy

• Do not start by stating the problem as outlined in the assignment.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M92655
  • Price:- $80

Guranteed 48 Hours Delivery, In Price:- $80

Have any Question?


Related Questions in Accounting Basics

Question what discoveries have you made in your research

Question: What discoveries have you made in your research and how does this information inform your ability to evaluate effective coaching and its impact on organizations? Consider these guiding questions: 1. What core c ...

Question requirement 1 read the article in below attachment

Question: Requirement: 1. Read the article in below attachment, and answer the questions in a paper format. Read below requirements before your writing! 2. Not to list the answers, and you should write as a paper format. ...

Question as a financial consultant you have contracted with

Question: As a financial consultant, you have contracted with Wheel Industries to evaluate their procedures involving the evaluation of long term investment opportunities. You have agreed to provide a detailed report ill ...

Question the following information is taken from the

Question: The following information is taken from the accrual accounting records of Kroger Sales Company: 1. During January, Kroger paid $9,150 for supplies to be used in sales to customers during the next 2 months (Febr ...

Assignment 1 lasa 2-capital budgeting techniquesas a

Assignment 1: LASA # 2-Capital Budgeting Techniques As a financial consultant, you have contracted with Wheel Industries to evaluate their procedures involving the evaluation of long term investment opportunities. You ha ...

Assignment 2 discussion questionthe finance department of a

Assignment 2: Discussion Question The finance department of a large corporation has evaluated a possible capital project using the NPV method, the Payback Method, and the IRR method. The analysts are puzzled, since the N ...

Question in this case you have been provided financial

Question: In this case, you have been provided financial information about the company in order to create a cash budget. Management is seeking advice or clarification on three main assumptions the company has been operat ...

Question 1what step in the accounting cycle do adjusting

Question: 1. What step in the accounting cycle do Adjusting Entries show up 2. How do these relate to the Accounting Worksheet? 3. Why are they completed at the end of each accounting period? The response must be typed, ...

Question is it important for non-accountants to understand

Question: Is it important for non-accountants to understand how to read financial statements? If you are not part of the accounting/finance function in a business what difference would it make? The response must be typed ...

Question refer to the hat rack cash flow statement 2002 in

Question: Refer to the Hat Rack Cash Flow Statement, 2002 in the text on page 17. Answer the following questions and submit to me via Canvas by the due date. 1. Cash flow from operations? 2. Cash flow from investing? 3. ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As