Testbank

to accompany

Contemporary Issues in
Accounting

Michaela Rankin, Patricia Stanton,

Susan McGowan, Matthew Tilling,
Kimberly Ferlauto & Carol Tilt

Prepared by
Matt Tilling

John Wiley & Sons Australia, Ltd 2012

 Chapter 11 Sustainability and Environmental Accounting

Chapter 11 Sustainability and Environmental Accounting

Multiple Choice Questions

1. The Brundtland report defined sustainable development as development that:

a. allows all people to meet their needs to an equal degree.

b. meets the needs of the future without compromising the ability of current
generations to meet their own needs.
*c. meets the needs of the present without compromising the ability of future
generations to meet their own needs.
d. continues at the current pace, neither increasing nor decreasing into the
foreseeable future.

Correct answer: c
Learning Objective 11.1 ~ Explain the meaning of sustainability and why an entity might
embrace sustainable development practices.

2. Which of the following statements about Intragenerational Equity is NOT true:

*a. It means that future generations should not have a lower quality of life.
b. It is concerned with poverty and access to food, water and shelter.
c. It is an important component of eco-justice.
d. None of the above, i.e. they are all true.

Correct answer: a
Learning Objective 11. ~ 1 Explain the meaning of sustainability and why an entity might
embrace sustainable development practices.

3. Which of the following terms is commonly used to mean Sustainability Reporting?

a. Corporate Social Reporting

b. Environmental, Social and Governance Reporting
c. Triple Bottom Line Reporting
*d. All of the above

Correct answer: d
Learning Objective 11.2 ~ Explain sustainability reporting and describe a range of methods
used to report on sustainability and environmental performance.

4. The three parts of the triple bottom line are:

a. Financial, Economic and Government

*b. Economic, Environmental and Social
c. Economic, Stakeholder and Employee
d. Financial, Customer and Government

Correct answer: b
Learning Objective 11.2 ~ Explain sustainability reporting and describe a range of methods
used to report on sustainability and environmental performance.

John Wiley & Sons Australia, Ltd 2012 11.1

Testbank to accompany Contemporary Issues in Accounting

5. The International Integrated Reporting Committee was formed by which two bodies?

a. NGO and GRI

b. UNHCR and IASB
*c. GRI and A4S
d. IASB and FASB

Correct answer: c
Learning Objective 11.2 ~ Explain sustainability reporting and describe a range of methods
used to report on sustainability and environmental performance.

6. According to the research undertaken to date, what is the relationship between

environmental performance and disclosure of corporations?

a. Poor performers have poor disclosure, but no relationship has been found for
good performers
b. Good performers have good disclosure, but no relationship has been found
for poor performers
c. Poor performers have good disclosure, but no relationship has been found for
good performers
*d. Research has not drawn any clear conclusions

Correct answer: d
Learning Objective 11.2 ~ Explain sustainability reporting and describe a range of methods
used to report on sustainability and environmental performance.

7. The UNs Principles of Responsible Investment have main been adopted by which
types of organisations?

a. Mining Companies
*b. Institutional Investors
c. Governments
d. Builders

Correct answer: b
Learning Objective 11.3 ~ Describe the commonly used guidelines for sustainability
reporting, and articulate how they can assist corporate reporting of sustainability
performance.

8. Which of the following is NOT a use for sustainability reports prepare under the GRI
framework?

a. Demonstrating organisational commitment to sustainable development

b. Comparing organisational performance over time
c. Measuring organisational performance with respect to laws
*d. None of the above, i.e. they are all uses for sustainability reports under GRI

Correct answer: d
Learning Objective 11.3 ~ Describe the commonly used guidelines for sustainability
reporting, and articulate how they can assist corporate reporting of sustainability
performance.

John Wiley & Sons Australia, Ltd 2012 11.2

 Chapter 11 Sustainability and Environmental Accounting

9. Which of the following is an Environmental Performance Indicator under the GRI

framework?

a. Rates of injury
*b. Impacts of transport
c. Anti-corruption policies
d. None of the above

Correct answer: b
Learning Objective 11.3 ~ Describe the commonly used guidelines for sustainability
reporting, and articulate how they can assist corporate reporting of sustainability
performance.

10. Which of the following is NOT a Labour Practices and Decent Work performance
indicator under GRI?

a. Workforce by gender
*b. Assessment of product life cycle stages for health and safety risks
c. Education and training programs in place
d. None of the above, i.e. they are all Labour Practices and Decent Work
performance indicators.

Correct answer: b
Learning Objective 11.3 ~ Describe the commonly used guidelines for sustainability
reporting, and articulate how they can assist corporate reporting of sustainability
performance.

11. Which of the following statements is most correct regarding Environmental, Social
and Governance Reports?

*a. They are becoming mandatory in an increasing number of countries

b. They are not currently required in any country
c. They are required as part of the IASBs accounting standards
d. Norway is leading the way with regards to requiring reporting

Correct answer: a
Learning Objective 11.3 ~ Describe the commonly used guidelines for sustainability
reporting, and articulate how they can assist corporate reporting of sustainability
performance.

12. Which of the following is NOT considered a stakeholder with potential interests in
corporate sustainability?

a. Banks
b. Government
c. Media
*d. None of the above, ie. They are all potential interested in corporate
sustainability.

Correct answer: d
Learning Objective 11.4 ~ Evaluate the range of stakeholders that can influence sustainable
business practice, and how entities can engage with these stakeholders.

John Wiley & Sons Australia, Ltd 2012 11.3

Testbank to accompany Contemporary Issues in Accounting

13. Stakeholder power is general considered to relate to which of the following factors?

a. The amount of impact the organisation has on them

b. How vocal they are prepared to be
*c. The degree of control they have over resources required by the organisation
d. None of the above

Correct answer: c
Learning Objective 11.4 ~ Evaluate the range of stakeholders that can influence sustainable
business practice, and how entities can engage with these stakeholders.

14. Ethical investment funds might be concerned about how individual companies
address climate change because

a. They dont want to invest money on companies that waste money

*b. They believe companies that address environmental risks will perform better
in the long run
c. They believe carbon emissions proxy for economic performance
d. None of the above

Correct answer: b
Learning Objective 11.4 ~ Evaluate the range of stakeholders that can influence sustainable
business practice, and how entities can engage with these stakeholders.

15. An EMS is a:

a. Emissions Measurement Scheme

b. Ecological Maintained Source
*c. Environmental Management System
d. Ethical Mission Statement

Correct answer: c
Learning Objective 11.5 ~ Explain how entities can use environmental management systems
to improve environmental performance and reporting.

16. ISO 14001 Environmental Management requires certifying companies to assess

environmental performance against

*a. Internally developed policies, objectives and targets

b. Industry benchmarks
c. Government set standards
d. Internationally established values

Correct answer: a
Learning Objective 11.5 ~ Explain how entities can use environmental management systems
to improve environmental performance and reporting.

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 Chapter 11 Sustainability and Environmental Accounting

17. The Kyoto Protocol:

a. Sets standards on corporate reporting of carbon emissions

*b. Commits countries to achieving specific greenhouse gas emissions reductions
c. Forbids trading in greenhouse gases
d. All of the above

Correct answer: b
Learning Objective 11.6 ~ Evaluate the implications of climate change for accounting.

18. An emissions trading scheme:

a. Can also be referred to as a cap and trade scheme

b. Allows the trade of excess emissions permits
c. Usually involves substantial fines for excessive polluters
*d. All of the above

Correct answer: d
Learning Objective 11.6 ~ Evaluate the implications of climate change for accounting.

19. As of 2012, the IASB project on Accounting for Carbon Emissions

a. Is complete with the release of IFRS 4

b. Is currently an Exposure Draft (ED133/A)
*c. Is currently paused
d. Does not exist

Correct answer: c
Learning Objective 11.6 ~ Evaluate the implications of climate change for accounting.

20. Climate change has the ability to impact on traditional financial accounting in what
way?

a. Liability valuation
b. Asset Impairment
c. Risk disclosure
*d. All of the above

Correct answer: d
Learning Objective 11.6 ~ Evaluate the implications of climate change for accounting.

John Wiley & Sons Australia, Ltd 2012 11.5