Seminar on Management Accounting

by Riwayadi, SE., MBA., Ak., CA., CSRS., CPMA., CSRA.

The Reaction Paper by Group 3 :

Naurah Atika Dina
Nisrina Afifah
Rana Syifa Medinda

Meetings 6 : General Disclosures

The growing uptake of the GRI framework has been driven in part by its potential benefits. Because of its
flexibility and global reach, the framework opens opportunities to benchmark, compare,and
communicate social and environmental efforts within and across sectors. It can serve as a tool to
manage corporate reputation and pursue competitive advantage. The framework is also relevant to
report readers insofar as it provides a platform for dialogue with companies and promotes disclosures
that can underpin a variety of purposes, such as ethical investing, political positioning and academic
research. These benefits are hardly disputed. What remains debatable, though, is whether these and
other benefits outweigh the framework’s weaknesses.

For GRI 103, generally is about gathering information that already exist and distilling it, taking away
proprietary information, adding any explanatory information, taking away material that doesn t matter
to anybody, and reporting it. But, that is not what is actually happening. Because they have all these
disparate systems, most companies don t know until 9, 12, even 16 months later what they actually did.

1. Aside from the obvious benefits that come from consistent and standardized reporting, a single,
universally recognized reporting framework also would relieve companies of having to respond
to sometimes hundreds of different questionnaires in various reporting formats from various
stakeholders.
2. All sorts of people ” ethical investors, NGOs, and governments ” are asking companies for
information and they all want it in their own format.
3. No standards, no norms, no protocols, in terms of what is being assured. So outside of reliance
on the existing financial assurance procedures.
4. There is less focus on noncompany operations. Given so many of the serious social and
environmental violations occur in a company s extended global supply chain, it is an issue that
needs to be clearly addressed.
5. Critics point out that to coax investors and analysts away from their favorite, self- composed
reporting format, the GRI has to become comprehensive enough (and accepted enough), to
satisfy all parties that certification really does mean that a company is truly protecting its
 reputation as much as possible from unexpected social and environmental violations. Until then,
it argued that GRI will be seen by many companies as just another reporting option.
6. The output from the GRI is said by critics to be of little value except to experts familiar with
social and environmental standards. It is not an easy issue to remedy, because it is just that sort
of public relations spin that the GRI is hoping to eliminate. After all, the GRI is trying to push
companies toward putting social and environmental reporting on par with normal financial
reporting ” and financial reports, even when furnished with company-friendly photos and an
upbeat style, are still judged on content and make for pretty dry reading themselves .
7. Moreover, the GRI allows companies to implement the framework incrementally, with the
option of omitting many of the core indicators altogether. Several companies have chosen to
avoid the phrase in accordance with the GRI, choosing instead to simply contend that the GRI
informed development of their report. It is an uncomfortable, but probably necessary
concession to the practical issue of attracting companies that are still not, for whatever reasons,
prepared to fully disclose their activities.
8. The potential drawback is that this is a voluntary code, allowing companies to continue to use
reporting as an opportunity for public relations spin rather than a serious effort at measuring
and improving performance. Some companies use the guidelines loosely, while others are more
rigorous about telling their story ˜warts and all .

Gri 103 is about disclosures of management approach content along with additional guidance
and recommendation. Management Approach sets out reporting requirements about the
approach an organization uses to manage a material topic. This Standard can be used by an
organization of any size, type, sector or geographic location. One of the root of deficiencies is it
is to subjective instead of objective, thus it will impact on various interpretation by users.