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37 Cards in this Set
- Front
- Back
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Auditor- Unqualified Opinion |
-Clean or good opinion -When company's finical statements fairly present its finical position, results of operations, and cash flows, and conform to GAAP in the US |
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IFRS, GAAP, FASB Stands for |
IFRS: International Financial Reporting Standards GAAP: Generally Accepted Accounting Principles FASB: Financial Accounting Standards Board |
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SEC Stands for |
Securities and Exchange Commission |
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FASB established what? |
GAAP are established by FASB, since it's establishment in 1974 |
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Role of SEC |
-Regulate companies that list their stock for sale on the stock exchanges in the U.S. -Requires GAAP to be followed in a company's financial statements |
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Need for IFRS |
-In 1974 there was an agreement by many countries to establish an IASC to produce international accounting standards (IAS) -Need for common language that allowed finical statement users to compare companies across the globe and minimize compliance costs and inefficiencies by companies in preparing multiple sets of financial statements -Also was designed to assist developing and smaller nations unable to establish their own accounting standards |
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FASB created |
1974 |
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IASC Stands for |
International Accounting Standards Committee |
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IASC produced... |
International Accounting Standards (IAS) |
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IASB Stands for... |
International Accounting Standards Board |
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IASC today? |
-Morphed into IASB, independent accounting standards body based in London -US is founding member |
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IASB |
We look to for developing international financial reporting standards (IFRS) |
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Norwalk (CT) Agreement |
-In 2002, IASB and FASB announced joint plans for "convergence"
-Goal is to examine the accounting issues for which the IASB standards and FASB standards differ -See if there is way to converge the standards so that the differences are resolved |
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Status of IFRS |
-Over 130 countries have adopted IFRS (includes all of the G-20 countries except US) -EU requires companies whose securities are listed on the EU stock exchange to use IFRS |
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SEC Staff Report |
-SEC issued staff report July 12, 2012. -Suggested it was not going to recommend requiring IFRS for U.S. companies trading stock on the U.S. stock exchanges -Final decision rests with SEC Commissioner |
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Sustainability
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Term used to describe the ability of a company to create products that meet the needs of today without impacting the ability of future generations to meet their needs; incorporates social, environmental, and finical concerns. (interperiod equity, and going concern) |
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Corporate Social Responsibility |
Sustainability is a component of this, CSR is a responsibility to a board set of stakeholders, not just to stockholders |
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Sustainability calls for...
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A decent standard of living for everyone today without compromising the needs of future generations |
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Sustainable Companies importance |
Care not only about delivering a return on investment to their stockholders, but also about their employees and other stakeholders with an interest the company's impact on the environment |
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Three P's- Triple Bottom Line |
Profit, People, and Planet (Economic, Human, and Environment) |
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Stakeholders
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Can affect or be affected by the actions of a business as a whole |
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Stockholders |
A shareholder of the company, holds share in a company |
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GRI Stands for... |
Global Reporting Initiative |
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Efforts of the GRI |
-Corp. sustainability reports have been advanced -This nonprofit org. vision = sustainable global economy where the org.'s manage their economic, environmental, social, and governance performance and impacts responsibly and report transparently |
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GRI's Mission |
To make sustainability reporting standard practice by providing guidance and support to organizations |
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G4 Framework |
Emphasizes reporting on issues that are material - "reflect the organization's significant economic, environmental, and social impact." (The Three P's ) |
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Social Impact is broken down to...
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Labor, Human Rights, and Society |
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Global 100 |
Nonprofit that "centers on twelve clearly-defined key performance indicators, which bring clarity and objectivity to the world of corporate sustainability performance measurement" |
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What these companies are listed in Global 100 |
- Each year Global 100 ranks the 100 most sustainable publicly traded companies in the world - To be considered, companies must issue a sustainability report that included information on at least 75% go the key performance indicators |
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12 Performance Indicators for Global 100 |
1. Energy Productivity 2. Carbon Productivity 3. Water Productivity 4. Waste Productivity 5. Innovation Capacity 6. Percentage Tax Period 7. CEO to Average Worker Pay 8. Pension Fund Status 9. Safety Performance 10. Employee Turnover 11. Leadership Diversity 12. Clean Capitalism Pay Link |
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Understanding Products Cradle-to-Grave |
-An adaptation of a manufacturing company's value chain is the view of a product from cradle-to-grave |
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Cradle-to-Grave view helps... |
Understand the impact that each product has on the environment from its inception until its eventual disposal |
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Cradle-to-Grave approach |
-Also helps to see a larger group of stakeholders involved in the entire life of a product -Also can highlight suppliers, distributors, and disposers who are attached to a product but may not have as good of a reputation for social responsibility |
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Cradle-to-Grave Diagram |
Research and Development of Product==>Getting Raw Materials==>Transporting Raw Materials==>Making the Product==>Distributing and Selling the Product==>Consumer Using the Product==>Consumer Disposing of Product |
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Accounting for Sustainability |
- Capture human resource and environmental-related information on job cost sheets - Use multiple manufacturing overhead accounts that separate use of environmental resources, use of chemicals, waste disposal - Use standardized processes and costs for uncovering inefficiencies and waste - Use budgets to communicate sustainability goals/targets in the short and long-term - Measure the costs and benefits of sustainable initiatives |
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Reporting on Sustainability |
-Incorporate sustainability into the balanced scorecard -Participate in the Global Reporting Initiative and integrate all types of external reporting, includding corporate social responsibility (CSR) reports -Engage auditors to do performance audits to provide "assurance" that goals are being met |
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Business Impacts of Sustainability
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There are six main ways that sustainability can help a company increase its "bottom line" and return on investment to stockholders 1. Reduce Cost 2. Improve Image 3. Reduce Risks 4. Create New Revenue & Inc. Market Share 5. Attract Talent 6. Attract Capital |
