Assignment Billiton compared with RIO Tinto Limited. Introduction

Assignment Cover Sheet Student ID NumberStudent Name Given NameMIT170648ARAVINDKASHIVASI RAMACHANDRA JATIN    Course:School: MitUnit Code: BA320Unit Title:  BA320 Accounting TheoryDue Date: 31/01/2018Date Submitted: 25/01/2018Campus: MelbourneLecturer/ Tutor: Mr Mohammad Morshed A Morshed A Sarker              Executive summary 2Introduction 2Conclusion 2Reference list 2 Executive summary This report provides analysis and evaluation of financial statements pertaining to accounting policies and PPE. Their measurement, disclosure and comparison of components in accounting policy also the statement of financial position, the Corporate Social Responsibility of BHP Billiton compared with RIO Tinto Limited. Introduction  Body At BHP their commitment to the safety of their workers is their top priority with the recent incident at Escondida mine in October 2016 and Goonyella Riverside mine in August 2017 their commitment to safety became the top priority as they lost 2 lives in the incident which forced the company to take measures on improvement of their workers safety and set an independent investigation to look into both the fatalities and take measures to prevent any further damage. In 2017 their commitment to do the right with respect to the dam failure in Samarco in Brazil increased with the focus to rebuild the whole communities and restore the impact on the environment. They have also committed themselves to work without tiring and also for longer duration to do everything in the right way and bring back the ecosystem back to its original shape. From 2013 they have shown a dutifully firm and unwavering dedication to all the values outlined in the charter which is evident in their sustainability performance targets. They have also made $2.3 billion voluntary contributions in community programs since 2001, 4.7 billion paid in taxes and royalties in just FY2017  (Bhp.com, 2018). They aim to  overreach the minimum compliance requirements to protect the environment and have worked for it to minimise the impact of their operations and also encourage the conservation and thoughtful use of natural environment. Their efforts to reduce greenhouse gas emission and transparency in disclosure have established themselves as the leaders in mining sector. They have reduced 975000 tonnes of CO2 since 2013. Their new 5 year sustainability performance targets is framed on global sustainability agreement and frameworks which are in alignment to the Paris agreement and The UN sustainable Development Goals.  A global standard is in place for BHP which states the necessary conditions for managing their interests in their NOJVs, which include consistent framework to identify and risk management across. It addresses the matters of audit and input on succession planning for leadership position also closely work with partners on a  vision to bring permanent changes in priority areas , communication strategies and work plans in accordance with the global standards. Their Zero work related fatalities, improvement of total recordable injury frequency (TRIF) target, risk review for dams and taillings management and environmental programs came in place after the losses faced by the company in order to rectify the error made year on year. and the stakeholder pressure made the link between sustainability to its risk management strategy. It is clear from reading their annual report, as well as specific reports on their website, that BHP is committed to doing their best when it comes to lessening their environmental footprint and that they are fully aware of the importance of having sufficient management accounting processes in place in order to monitor, develop and improve their practices. BHP acknowledges the importance of having a framework in place in order for employees to recognize that managing risk effectively is an essential part of creating value for the business. The framework implements a ‘three lines of defense’ model; ownership of risk by the operations, control of risk by group functions and management committees and assurance of the systems by group audit and assurance team. This emphasizes that every employee is responsible for enforcing BHP’s values. Lately, firms have started to recognise the benefits of CSR disclosure and have started to increase the information provided to their shareholders, stakeholders and potential investors with the increase in the amount of benefits the companies are able to reap (Carnevale, C., & Mazzuca, M. 2014). Firstly, CSR are voluntary in nature and later provide a research motivational aspects of disclosure. Many stakeholders and shareholders are increasingly asking for a report on the company’s social interactions to get a clear view on the company’s which CSR report is providing. There is a gradual shift from voluntary information provided and demanded information can be witnessed across the globe and Australia is one of them. This shift can be witnessed as natural consequence of pressure on companies to be responsible, economic and social since a company is an artificial citizen and should have the same responsibilities as a natural citizen.  Australia is increasing the environmental legislation’s but there is no legislation on disclosure of environmental information in the annual reports. BHP being one of the top mining companies is doing the right thing by preparing the CSR report for their stakeholders and shareholders. Even though company is investing a sum of money by following the right practices, in the preparation of CSR and also  to the environment they still have no hole in their pocket as they are reaping the benefits of making a CSR. Prior  studies (Rezaee  et  al.  1995;  Schaltegger  &  Burritt  2000;  Burritt  2002)  have  articulated  the  need  for standardisation of SER practices and use of the GRI framework (Schaltegger & Burritt 2000; Burritt 2002; Holland & Foo 2003; Raman 2006; Ho & Taylor 2007; ), which is seen as the ‘ideal’ model. GRI reporting guidelines have also gained recognition and endorsement from various stakeholders, including intergovernmental agencies and supranational bodies, such as the   European   Union,   United   Nations,   Organisation   for   Economic   Co-operation   and   Development (OECD), and the World Economic Forum (Ho & Taylor 2007). Inchausti (1997) as cited in Ali et al. (2004) argues that management of profitable companies may   disclose   detailed   information   in   the   annual   report,   as   they   feel   comfortable   communicating this good news to the stock market in order to improve the firm’s valuation.Conclusion  Reference list Bhp.com. (2018). Cite a Website – Cite This For Me. online Available at: https://www.bhp.com/-/media/documents/investors/annual-reports/2017/bhpsustainabilityreport2017.pdf? Accessed 15 Jan. 2018.Long, C., Bin, S., Albert, T., & Wei, Y. (2016). Audited Financial Reporting and Voluntary Disclosure of Corporate Social Responsibility (CSR) Reports. Journal Of Management Accounting Research, 28(2), 53-76. doi:10.2308/jmar-51411Thijssens, T., Bollen, L., & Hassink, H. (2015). Secondary Stakeholder Influence on CSR Disclosure: An Application of Stakeholder Salience Theory. Journal Of Business Ethics, 132(4), 873-891. doi:10.1007/s10551-015-2623-3Carnevale, C., & Mazzuca, M. (2014). Sustainability report and bank valuation: evidence from European stock markets. Business Ethics: A European Review, 23(1), 69-90. doi:10.1111/beer.12038Waller, D. S., & Lanis, R. (2009). CORPORATE SOCIAL RESPONSIBILITY (CSR) DISCLOSURE OF ADVERTISING AGENCIES. Journal Of Advertising, 38(1), 109-121.   Rezaee,  Z,  Szendi,  J  &  Aggarwal,  R  1995,  ‘Corporate  governance  &  accountability  for  environmental concerns’, Managerial Auditing Journal,vol. 10, no8,pp. 27-33. http://dx.doi.org/10.1108/02686909510093598       Schaltegger,  S  &  Burritt,  RL  2000,  Contemporary  Environmental  Accounting,  Greenleaf, SheffieldHo, LJ & Taylor, ME 2007, ‘An Empirical Analysis of Triple Bottom Line Reporting & its Determinants:  Evidence  from  the  United  States  &  Japan’,  Journal  of  International Management & Accounting,vol. 18, no2, pp. 123-150.  

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