Test Bank for Financial Accounting An Integrated Approach, 5th Edition : Trotman

Test Bank for Financial Accounting An Integrated

Approach, 5th Edition : Trotman

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Chapter 7—Sustainability reporting

MULTIPLE CHOICE

1. Sustainability management is concerned with:

A. reducing carbon emissions produced by the organisation
B. the maintenance and long-term enhancement of an organisation’s overall impact and
health
C. maximising the net returns to shareholders
D. maximising the net profits of the organisation.
ANS: B PTS: 1 DIF: Easy TOP: What is sustainability
reporting?

2. Triple bottom line reporting refers to:

A. environmental, social and economic performance
B. reporting on carbon emissions
C. maximising the net returns to shareholders
D. maximising the net profits of the organisation.
ANS: A PTS: 1 DIF: Easy TOP: What is sustainability reporting?

3. Which of the following statements regarding corporate sustainability in NOT true?

A. Corporate sustainability creates long-term value to shareholders.
B. Corporate sustainability manages risks from economic, economic and environmental
developments.
C. Corporate sustainability involves reducing and avoiding sustainability costs and risks.
D. Corporate sustainability is primarily concerned with maximising the return to shareholders
to maintain the future of the organisation’s return to its shareholders.
ANS: D PTS: 1 DIF: Easy TOP: What is sustainability reporting?

4. Which of the following is NOT disclosed in sustainability reports?

A. assessments of the impact on the local community
B. policies and practices regarding sourcing from local suppliers
C. initiatives to reduce greenhouse gas emissions
D. accounting policies and estimates.
ANS: D PTS: 1 DIF: Medium TOP: What is reported in sustainability
reports?

5. Which of the following is NOT an example of capital that reflects on an organisation’s impact and
wealth?
A. human capital
B. working capital
C. social capital
D. natural resources.
ANS: B PTS: 1 DIF: Easy TOP: What is sustainability reporting?

6. The stakeholder engagement process does NOT involve:

A. engaging stakeholders to identify and understand sustainability issues
B. determining the relevance of sustainability issues
C. stakeholders in identifying and evaluating sustainability issues
 D reporting sustainability issues to shareholders.

ANS: C PTS: 1 DIF: Medium TOP: Do stakeholders require more

than financial reporting?

7. Which of the following is NOT a reason why a company would prepare a sustainability report?
A. increasing the return to shareholders
B. demonstrating a commitment to managing the environment
C. increasing the company’s reputation
D. improvement of management reports.
ANS: A PTS: 1 DIF: Difficult TOP: Why do organisations produce
sustainability reports?

8. Disclosure of information in sustainability reports is determined by:

A. the organisation’s reporting
B. accounting standards
C. Australian Securities Industry Commission
D. company law reporting requirements.
ANS: A PTS: 1 DIF: Medium TOP: Criteria for sustainability
reporting

9. The Global Reporting Initiative sets out:

A. guidelines of how to reduce carbon emissions
B. principles to measure and report measures used to reduce carbon emissions
C. principles to measure and report economic, environmental and social performance
D. how organisations should behave ethically in regard to carbon emissions.
ANS: C PTS: 1 DIF: Medium TOP: Criteria for sustainability
reporting

10. For which item is the Global Reporting Initiative not useful?
A. demonstrating how the organisation is influenced by expectations about sustainable
development
B. sustaining the level of dividends to shareholders
C. comparing performance within an organisation
D. assessing sustainability performance.
ANS: B PTS: 1 DIF: Easy TOP: Criteria for sustainability reporting

11. Which of the following is an economic performance indicator?

A. Direct energy consumption by a primary energy source
B. percentage of products sold and their packaging materials that are reclaimed
C. Total direct and indirect gas emissions
D. Development and impact of infrastructure investments and services
ANS: D PTS: 1 DIF: Medium TOP: Criteria for sustainability
reporting

12. Which of the following is an environment performance indicator?

A. policy, practices and spending on locally based suppliers
B. direct economic value generated
C. total direct and indirect gas emissions
D. development and impact of infrastructure investments and services.
 ANS: C PTS: 1 DIF: Medium TOP: Criteria for sustainability
reporting

13. Which of the following is not a recent trend in sustainability reporting?

A. Corporate responsibility reporting helps companies grow their business and increase its
value.
B. Corporate responsibility reporting has been combined with financial reporting.
C. Corporate responsibility reporting provides financial value.
D. Corporate responsibility reporting guarantees that dividends will be paid to shareholders.
ANS: D PTS: 1 DIF: Difficult TOP: Trends in sustainable reporting

14. Which of the following is not a reason for having sustainability reports audited?
A. to provide improved reported process
B. to improve the quality of the information in sustainability reports
C. it is a requirement of Australian accounting standards
D. to increase the credibility of sustainability reports.
ANS: C PTS: 1 DIF: Medium TOP: Trends in sustainable reporting

15. Measurement and reporting of climate change related information is of use to stakeholders to:
A. evaluate the level of dividend they may receive
B. understand the impact of the business operations on the environment
C. identify and evaluate sustainability issues
D. measure the impact of the business operations on the environment.
ANS: B PTS: 1 DIF: Difficult TOP: Energy efficiency as an important
example of sustainability

16. Energy and greenhouse gas disclosure involves the reporting of:
A. greenhouse gas emissions
B. the organisation’s commitment to managing the environment
C. energy greenhouse gas emissions and climate change information
D. climate change information.
ANS: C PTS: 1 DIF: Medium TOP: Energy efficiency as an important
example of sustainability

17. Which statement regarding climate change related information in sustainability reports is
incorrect?
A. Climate change information is presented in narrative format.
B. Climate change information includes strategic analysis.
C. Climate change information includes the risks, opportunities and governance associated
with impacts on climate change.
D. Climate change information is presented in quantitative format in addition to narrative
format.
ANS: D PTS: 1 DIF: Medium TOP: Energy efficiency as an important
example of sustainability

18. Which of the following approaches for measuring energy usage is not allowed by international
reporting standards?
A. equity share approach
B. proportionate share approach
C. financial control approach
 D. operational control approach.
ANS: B PTS: 1 DIF: Easy TOP: Energy efficiency as an important
example of sustainability

19. The equity share approach:

A. is associated with an organisation’s percentage ownership
B. reflects the authority to introduce and implement operating, environmental and health and
safety policies
C. reflects to ability to direct financial policies to gain economic benefits
D. reflects the organisation’s use of accounting standards in regard to sustainability reporting.
ANS: A PTS: 1 DIF: Easy TOP: Energy efficiency as an important
example of sustainability

20. The financial control approach:

A. is associated with an organisation’s percentage ownership
B. reflects the authority to introduce and implement operating, environmental and health and
safety policies
C. reflects to ability to direct financial policies to gain economic benefits
D. reflects the organisation’s use of accounting standards in regard to sustainability reporting.
ANS: C PTS: 1 DIF: Easy TOP: Energy efficiency as an important
example of sustainability

21. The operational control approach:

A. is associated with an organisation’s percentage ownership
B. reflects the authority to introduce and implement operating, environmental and health and
safety policies
C. reflects the ability to direct financial policies to gain economic benefits
D. reflects the organisation’s use of accounting standards in regard to sustainability reporting.
ANS: B PTS: 1 DIF: Easy TOP: Energy efficiency as an important
example of sustainability

22. The indirect approach to the calculation of greenhouse emissions:

A. measures the energy used and emissions generated at the source
B. uses the measurement of energy used and emissions generated at the source by an external
independent body
C. uses information from global sources to determine the average energy used and emissions
generated
D. uses default energy content and emission factors determined by an external body.
ANS: D PTS: 1 DIF: Medium TOP: Energy efficiency as an important
example of sustainability

23. The direct approach to the calculation of greenhouse emissions:

A. measures the energy used and emissions generated at the source
B. uses the measurement of energy used and emissions generated at the source by an external
independent body
C. uses information from global sources to determine the average energy used and emissions
generated
D. uses default energy content and emission factors determined by an external body.
ANS: A PTS: 1 DIF: Medium TOP: Energy efficiency as an important
example of sustainability
24. Which of the following is not an example of an energy and fossil fuel emissions source?
A. gaseous fuels
B. carbon capture and storage
C. liquid fuels
D. solid fuels.
ANS: B PTS: 1 DIF: Easy TOP: Energy efficiency as an important
example of sustainability

25. Which of the following is not an example of a fugitive emission source?

A. mineral products
B. oil and natural gas
C. coal mining
D. carbon capture and storage.
ANS: B PTS: 1 DIF: Easy TOP: Energy efficiency as an important
example of sustainability

26. An organisation has direct control over the amount of emissions it creates through:
A. its use of fuel to operate machinery
B. outsourcing printing activities
C. use of electricity supplied by an electrical company
D. an organisation does not have direct control over emissions.
ANS: A PTS: 1 DIF: Difficult TOP: Energy efficiency as an important
example of sustainability

27. The measurement of energy requires:

A. understanding how much fuel has been consumed or produced and how much energy is
stored in that fuel
B. understanding how much fuel has been consumed
C. measuring the energy stored in that fuel
D. evaluating the energy content of a particular fuel.
ANS: A PTS: 1 DIF: Medium TOP: Energy efficiency as an important
example of sustainability

28. The Energy Efficiency Opportunities Act requires:

A. large energy-using organisations to evaluate and implement cost effective opportunities
B. that measures be evaluated and determined to reduce energy and greenhouse emissions
C. none of these options – companies are not required to reduce energy emissions
D. large energy-using organisations to identify and evaluate cost effective opportunities.
ANS: D PTS: 1 DIF: Medium TOP: Energy efficiency as an important
example of sustainability

29. Which statement regarding the Carbon Disclosure Project (CDP) is not true?
A. The CDP is a project seeking to understand the climate change exposure of assets used by
organisations.
B. The CDP lists companies that are the highest achiever in reducing energy and emissions.
C. The CDP annual survey includes information regarding climate change strategies, energy
and emission reduction targets and emission performance information.
D. The CDP is a project seeking to require companies to report climate change strategies.
ANS: D PTS: 1 DIF: Medium TOP: Energy efficiency as an important
 example of sustainability

30. Which of the following does A Framework for Greenhouse Gas Reporting NOT recommend be
required?
A. a statement of greenhouse gas emissions
B. stand-alone sustainability reports
C. management discussion and analysis
D. an independent assurance statement.
ANS: B PTS: 1 DIF: Easy TOP: Energy efficiency as an important
example of sustainability

31. Absolute targets:

A. are expressed as ratio, emissions or energy relative to another measure
B. are expressed as a reduction of a specific quantity of emissions or energy over time
C. measure the efficiency of a process relative to its energy or emissions
D. express the energy or emission reduction target to be achieved by an organisation.
ANS: B PTS: 1 DIF: Medium TOP: Energy efficiency as an important
example of sustainability

32. Integrated reporting:

A. includes a sustainability report regarding energy reduction and greenhouse emissions in an
organisation’s annual report
B. is an additional report to be prepared by organisations as required by accounting standards
C. reflects the commercial, social and environmental setting in which the organisation
operates
D. is additional information regarding energy emissions included in the direct report of an
organisation’s annual statement.
ANS: C PTS: 1 DIF: Medium TOP: Integrated reporting

33. Which of the following is not a principle of integrated reporting?

A. providing information about an organisation’s future prospects, its risks, and its plans for
the future
B. a demonstration of how the organisation’s performance is linked to its organisational
activities and the environment in which it operates
C. the strategies undertaken to ensure divided returns to shareholders
D. the strategies and objectives of the organisation.
ANS: C PTS: 1 DIF: Medium TOP: Integrated reporting

34. Which of the following statements regarding integrated reporting is not true?
A. Integrated reporting is an additional report included in the annual financial reports of an
organisation.
B. An integrated report does not only report on the organisation’s stewardship of its financial
capital.
C. Integrated reports focus only on the most material information.
D. Integrated reporting includes short-term, medium-term and long-term considerations.
ANS: A PTS: 1 DIF: Medium TOP: Integrated reporting

35. Which of the following is a not a difference between integrated reporting and traditional financial
reporting?
A. Traditional financing reporting is based on a short-term timeframe while integrated
Test Bank for Financial Accounting An Integrated Approach, 5th Edition : Trotman

reporting includes short-term, medium-term and long-term frameworks.

B. There are no differences between integrated and traditional financial reporting.
C. Traditional financial reporting focuses on the financial stewardship of the organisation,
while integrated reporting also includes stewardship of natural, human, social and
manufactured capital.
D. Traditional financial reports focus on past performance, while integrated reports also
consider the future.
ANS: B PTS: 1 DIF: Medium TOP: Integrated reporting

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