Accounting in Organisations and Society Individual Assignment: Length: You MUST answer all questions.

Background

Computers in many forms are an important part of our life. However, do you know the life

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stages of a computer? The life of a computer can be summarized into the following stages. The

initial stage is the extraction of mineral resources from the earth. The second stage is to

manufacture these minerals into different parts of a computer through various processes. The

computers are then packed and transported to different locations in the world to be sold to

individuals and businesses. At some stage in its life it may need to be repaired when it

malfunctions. At the end of its life, the parts of a computer may either be recycled or go to

landfill.

It should be noted that computers have some social and environmental impacts. For instance:

• some mineral resources are non-renewable and also damage the environment on their

extraction.

• manufacturing often happens factories in developing countries where there are cases of

workers including young children getting exploited.

• packing computers involve a significant amount of Styrofoam and cardboard which

have their own environmental impact.

• the transport of computers for thousands of kilometers has an environmental impact in

the form of large amount of carbon emissions

• the use of computers requires electricity, which may be produced from coal, petroleum,

or natural gas etc.

In recent years, an increasing number of companies have become more aware of the importance

of sustainable development and are making solid efforts to reduce their social and environment

impacts. For example, Dell – one of the largest computer corporations – aims to develop its

business in a sustainable way. More information can be found from the Dell 2020 Legacy of

Good Plan. In this plan, Dell is committed to contribute in a positive way to the environment

(e.g. reducing greenhouse gas emissions), communities (e.g. providing grants) and people (e.g.

maintaining a good relationship with worldwide fellow team members). In addition to this

program, Dell features a technology recycling program, which gives discarded electronic

devices a new life through re-use or by recycling them. Dell became the first computer

company that does not export e-waste to developing countries for landfill.

Assignment Tasks

Assume you are a newly appointed accountant in a local computer company. This is a private

company with 30 shareholders, and it has a highly integrated industrial value chain. Currently,

the company has 6 departments namely, the Research and Development, Manufacturing,

Finance, Sales and Marketing, Distribution and Human Resources department with a total of

150 employees. Managers in each department are given the authority regarding operational

decisions and their performance is measured based on the company’s profit. In order to cut

down costs, the manufacturing department manufactures computers locally using parts that are

mostly imported from different suppliers in Bangladesh and China. Recently, the

manufacturing department manager heard that some of their suppliers are exploiting their

workforce in order to produce these parts. These workers are forced to work long hours in

unsafe working conditions on very low wages. The former accountant is unsure who should be

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responsible to ensure the quality of working conditions and wages to the local staff of suppliers

and so she has decided to ignore it.

As well as the manufacturing manager, the CEO of this company has noticed the unprecedented

awareness from customers on the company’s social responsibilities. Many customers expressed

the idea that they would not purchase any unethically produced or environmentally unfriendly

products. So the CEO is passionate about the social and environmental issues, and wonders

what positive or negative social and environmental impact his company’s computers might

have.

Required

1. As a newly appointed accountant, you would like to have a better understanding of the

new company. You believe the most efficient way is to identify important stakeholders.

Identify five relevant stakeholder groups and discuss how different accounts could be

used to satisfy each group’s information requirements.

2. Regarding the social and environment issue, you found the major difficulty faced by

the CEO is to identify the direct and indirect social and environmental impacts of the

company’s operations. You have been asked to assist the CEO with this task and are

required to draw the supply chain, and select one or two stages, identifying a total of

four possible social and environment impacts. If the impact is detrimental either

socially or environmentally, give suggestions to minimize the impact. If the impact is

positive, give suggestions as to maximize the benefit.

3. After the CEO has discussed his view on social and environmental awareness of

customers, the manufacturing department manager approaches you to seek your advice

on whether an investigation into the working conditions of the factories of their

overseas suppliers should occur. You believe that the manager should take action

immediately as it is important to work with ethical suppliers. Give either one or two

real life examples to discuss how a business could be negatively impacted if they are

working with unethical suppliers.

4. The CEO is considering an investment of $1m to establish a sustainability department.

The CEO uses the five step process (see Module 2 Topic 1) to make decisions, and is

wondering how you as an accountant could assist in the decision making process.

Advise the CEO on how you can assist with his decision making. Be specific and in

your response make reference to the five step process.

5. Subsequently a plan to establish a sustainability department is agreed upon. Some

important shareholders attempted to block this proposal. Their belief as the owners of

this company is that the company should aim to maximize the value of their shares,

however, the new sustainability department could significantly increase the costs and

therefore reduce the profit. Think of a potential sustainability project and explain

whether and how that project could potentially increase the value of their shares in the

long term. Further, discuss how value could be created for other stakeholders (if any)

when the project is implemented

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