BUACC 2614 – Management Accounting 2
Summer 2012/27
Assignment
- Problem 17.46 from the BUACC 2614 text book.
- Format: Written response to each question
- Contribution to overall assessment: 25%
- Due date: week 10 (23rd January 2013 at 4.00pm sharp)
- Your work must comply with the University’s General Guide for the Presentation of Academic Work.
- This assignment is to be completed in pairs. Please organise yourselves into pairs.
- Please make sure that names and ID numbers of both members are stated on the cover sheet of your submission.
- BUACC2614, Management Accounting 2
- Summer 2012/27 Group Assignment
Names: Student Numbers:
Bases of assessment | HD P NN |
Format: The IBCAR outline as per University’s General Guide for the Presentation of Academic Work. | |
Expression – clarity, style (formal and academic), coherence in writing, grammar, punctuation, spellings and sentence structure. Expression of your view (and not a catalogue of quotes/ others’ ideas) A logical flow of argument at both the paragraph level and the overall text level. Use of supporting arguments. Use of literature to support the argument. |
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Referencing procedure (within the text, and at the end of the text). Appropriately styled and punctuated bibliography. |
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Overall Presentation – including cover page, line spacing, page numbering. |
Overall grade
:
17.46)
Environmental
performance indicators; sustainability reporting: insurance company
WealhWise insurance has recently set up an internal information system to improve social and environmental practices within the company. The company has its head office in Brisbane and offices in all capital cities and every regional city with a population of more than 50,000 people. One of the underlying principles of the company is to be socially and environmentally responsible .This principle has been in place for many years, dating back to the firm’s founder, Jeannette Dai, who felt that she would like to contribute to social rather than simply maximizing profits.
The company is a major contributor to charities, particularly those that focus on the homeless and the poor. It actively promotes environmental management in all of the company operations. it sponsors a program that provides scholarships to disadvantaged students to allow them to attend university, and it is proud to offer employment in the company to long –term unemployed and the poor. Each year it publishes a sustainability report that summarizes its achievements across each area of performance.
Over time these activities have become a marketing strength of wealthwise. The social and environmental stance taken by the company has attracted many customers to the company. Listed on the Australian stock exchange in 2001.the company has also become a preferred investment of ethical and green investment funds.
The mission statement of wealthwise states that it will aim to:
- Support employees in achieving their personal and career goals
- Act in a socially responsible way when dealing with insurance clients and the general community
- Promote a better social and physical environment for the world.
However the current chief executive officer, Sylvia Trott, thinks that the firm has become complacent and is resting on its past achievements. she is concerned that the firm has built up a reputation for good social and environmental practices but is not “walking the talk’. There is some level of discontent among employees about the way that management treats staff and this is impacting on employee satisfaction. there have also been negative reports in the media of its treatment of business in Phuket and Langkawi that were damaged in the December 2004 Tsunami. The reports claim that the company has tries to minimize the amounts paid to these business by strictly applying clauses in the insurance contracts cover earthquake damage but not flood damage.
In 2004,the company’s net profit rose by 15 per cent to $ 173 million on an asset base of $1235 million. This is the third consecutive years of increased profits. Earnings per share were 62 cents ,and th market value was $5.40 per share. The board is concerned that wilthwise makes a loss on its insurance business, while its investment yield a strong return and are the main reason for the increase in profitability. its investment portfolio includes shares BHP Billiton ,Qantas ,Telstra and James Hardie industries.
the board adopts a sustainability approach to approach to viewing its performance and uses the following key performances indicators to assess performance:
Financial:
- Net profit
- Gross insurance premiums
- Return on investment
Economic indicators:
- Policy practices and spending on local suppliers
- Procedures for hiring local staff
- Development projects primarily for public benefit
Social indicators:
- Employee satisfaction ratings
- Percentage of women in the top three tiers of management
- Number of indigenous employees
- Customer’s ethical ranking of sales staff
- Number of staff hired who were previously unemployed teenagers.
Environmental indicators:
- Tonnes of paper recycled per annum
- Percentage reduction in electricity usage
- Litres of fuel per dollar of sales
Required:
- Explain what is meant by sustainability reporting and why a publicly listed insurance company like WealthWise may adopt this approach.
- Consider the list of key performance indicators used by Wealth Wise. Explain how these measures could be used to help achieve the mission.
- Suggest alternative performance measure that could be included in the performance measurement system to assist WealthWise to achieve its system.
- Write a report to a chief executive officer explaining what step she can take to encourage staff to behave in a way that support sustainability. Specifically explain to her how the performance measurement system could be used in a balanced way to support the achievement of the company goals.
Attachments: