Accounting Analyst’s assessment report:
Paper should be presented in the form of an analyst’s assessment report
PREPARATION:
Obtain a copy of the company listings in the Financial Times newspaper. Use the listing to select a company in the energy sector or the materials sector.
o You can find out about these sectors by referring to the other side of this page, also
https://www.msci.com/resources/pdfs/GICSSectorDefinitions.pdf.
Be sure to choose a company that reports what and how much it pollutes each year in an environmental report.
o Locate your chosen companys most recent environmental report AND financial statements on the internet, and download copies that you can work on.
QUESTION 1. In relation to the companys most recent environmental report, identify the:
1. Period covered by the environmental report
2. Method or framework used to prepare the environmental report, if any
3. Reporting boundaries used (see Chapter 3 and Chapter 4 of the GHG Protocol Standard for a discussion of reporting boundaries)
4. Types of greenhouse gases (GHG) emissions; for example, Type 1, Type 2, Type 3 (see the GHG Protocol Standard, page 25, for a discussion of types).
5. Sources of emissions; for example, operational areas and installations.
6. Volumes of emissions per thousand metric tonnes.
Note: A popular framework for environmental reporting is the GHG Protocol Standard
(refer to https://www.ghgprotocol.org/files/ghgp/public/ghg-protocol-revised.pdf, read pages 25-47, also available on Moodle).
QUESTION 2. Suppose the government has set a minimum price on direct (Type 1) GHG emissions of US$100 per metric tonne. Using the companys most recent published financial statements:
1. Describe the likely impact of the emissions price on the companys operations.
2. Name the management accounts that would be affected by the emissions price (e.g., overheads, inventories) and describe how each account would be affected.
3. Estimate the effect of the emissions price on the companys forecast profit levels and liquidity positions.
Your answer should be no more than 3,000 words. This limit includes tables and captions but excludes footnotes, endnotes, tables of figures and references. The material you will need to prepare for this assignment can be found in the Unit 3 reader.
For a good answer, you may find it useful to do your own research using the references included in the Unit 3 reader.
Also consider using the research databases (e.g. Web of Science, Proquest) available to you through the library, where you can read about environmental accounting in journals such as:
– The Accounting Review
– Accounting, Organizations & Society
– Critical Perspectives on Accounting
– Accounting, Auditing & Accountability Journal