Question 1

From the following list, calculate the total environmental external failure costs.

Accepted Answer

A)  $600 000 
B)  $650 000 
C)  $660 000 
D)  $620 000 
A)  $600 000 
B)  $650 000 
C)  $660 000 
D)  $620 000

Question 2

How does environmental management accounting (EMA) differ from traditional management accounting?

Accepted Answer

A)  EMA focuses on non-financial rather than financial information. 
B)  EMA includes environmental cost data in addition to traditional product cost data in the firm's management information system. 
C)  EMA focuses on external costs to society rather than internal cost data. 
D)  EMA is a reactive costing technique whereas traditional product costing is proactive. 
A)  EMA focuses on non-financial rather than financial information. 
B)  EMA includes environmental cost data in addition to traditional product cost data in the firm's management information system. 
C)  EMA focuses on external costs to society rather than internal cost data. 
D)  EMA is a reactive costing technique whereas traditional product costing is proactive.

Question 3

Which of the following costs is included in the five tiers of environmental costs?

Accepted Answer

A)  Contingent 
B)  Private 
C)  External 
D)  Period 
A)  Contingent 
B)  Private 
C)  External 
D)  Period

Question 4

Why are Tier-2 costs called 'hidden' environmental costs?

Accepted Answer

A)  They are hidden in the accounts so that stakeholders are unaware of the potential environmental risks of the firm. 
B)  They tend to be included in other accounts such as overhead and therefore are not easily identifiable. 
C)  They are uncertain because it is not possible to show them in a separate account. 
D)  Environmental costs cannot be estimated with any degree of certainty. 
A)  They are hidden in the accounts so that stakeholders are unaware of the potential environmental risks of the firm. 
B)  They tend to be included in other accounts such as overhead and therefore are not easily identifiable. 
C)  They are uncertain because it is not possible to show them in a separate account. 
D)  Environmental costs cannot be estimated with any degree of certainty.

Question 5

KPMG reported that globally 78% of companies worldwide refer to GRI guidelines in their corporate responsibility reports. According to the GRI (G4) guidelines, the product and services aspect would be categorised as:

Accepted Answer

A)  economic. 
B)  environmental. 
C)  social: society. 
D)  social: product responsibility. 
A)  economic. 
B)  environmental. 
C)  social: society. 
D)  social: product responsibility.

Question 6

The Global Reporting Initiative (GRI) Framework is a reporting system that aims to:

Accepted Answer

A)  enhance the firm's reputation in the community. 
B)  enable the inclusion of both financial and non-financial data in the firm's management information system. 
C)  reduce the risk of future litigation for breaching environmental laws. 
D)  increase organisational transparency and accountability. 
A)  enhance the firm's reputation in the community. 
B)  enable the inclusion of both financial and non-financial data in the firm's management information system. 
C)  reduce the risk of future litigation for breaching environmental laws. 
D)  increase organisational transparency and accountability.

Question 7

Which of the following environmental issues needs to be accounted for in decision making?

Accepted Answer

A)  The decision making will be flawed if environmental costs that differ between alternatives are not considered. 
B)  It is possible that a capital investment project will be financially superior but not environmentally superior. 
C)  Environmental costs are both positive (proactive) and negative (e.g. fines). 
D)  The decision making will be flawed if environmental costs that differ between alternatives are not considered AND it is possible that a capital investment project will be financially superior but not environmentally superior. 
A)  The decision making will be flawed if environmental costs that differ between alternatives are not considered. 
B)  It is possible that a capital investment project will be financially superior but not environmentally superior. 
C)  Environmental costs are both positive (proactive) and negative (e.g. fines). 
D)  The decision making will be flawed if environmental costs that differ between alternatives are not considered AND it is possible that a capital investment project will be financially superior but not environmentally superior.

Question 8

When an organisation relates the product value measured in dollars against the resources used this measurement is known as a(n):

Accepted Answer

A)  eco-intensity measure. 
B)  management performance measure. 
C)  operational performance measure. 
D)  eco-efficiency measure. 
A)  eco-intensity measure. 
B)  management performance measure. 
C)  operational performance measure. 
D)  eco-efficiency measure.

Question 9

Under ISO14031, which of the following is an environmental condition indicator?

Accepted Answer

A)  Percentage of raw materials that are from recycled sources 
B)  Air quality surrounding a company's main factories 
C)  The dollar amount spent on developing staff environmental awareness training programs 
D)  Percentage of suppliers checked for corruption charges 
A)  Percentage of raw materials that are from recycled sources 
B)  Air quality surrounding a company's main factories 
C)  The dollar amount spent on developing staff environmental awareness training programs 
D)  Percentage of suppliers checked for corruption charges

Question 10

Private environmental costs are:

Accepted Answer

A)  environmental costs that directly affect the profit of the organisation. 
B)  environmental costs for which the organisation can be held legally accountable. 
C)  environmental costs that can be quantitatively measured. 
D)  Both A and B 
A)  environmental costs that directly affect the profit of the organisation. 
B)  environmental costs for which the organisation can be held legally accountable. 
C)  environmental costs that can be quantitatively measured. 
D)  Both A and B

Question 11

How do environmental issues relate to the strategic decisions of the firm?

Accepted Answer

A)  Including environmental costs in business decisions recognises the high cost to the firm of environmentally irresponsible actions. 
B)  In the planning phase, firms should identify those managers responsible for environmental costs. 
C)  Environmental risk should be included in the risk assessment of the firm. 
D)  Socially responsible firms will set stringent environmental targets and measure management performance against those targets. 
A)  Including environmental costs in business decisions recognises the high cost to the firm of environmentally irresponsible actions. 
B)  In the planning phase, firms should identify those managers responsible for environmental costs. 
C)  Environmental risk should be included in the risk assessment of the firm. 
D)  Socially responsible firms will set stringent environmental targets and measure management performance against those targets.

Question 12

From the following list, calculate the total environmental prevention costs.

Accepted Answer

A)  $225 000 
B)  $150 000 
C)  $175 000 
D)  $255 000 
A)  $225 000 
B)  $150 000 
C)  $175 000 
D)  $255 000

Question 13

Under ISO14031, which of the following is an operational performance indicator?

Accepted Answer

A)  Percentage of raw materials that are from recycled sources 
B)  Air quality surrounding a company's main factories 
C)  The dollar amount spent on developing staff environmental awareness training programs 
D)  Percentage of suppliers checked for corruption charges 
A)  Percentage of raw materials that are from recycled sources 
B)  Air quality surrounding a company's main factories 
C)  The dollar amount spent on developing staff environmental awareness training programs 
D)  Percentage of suppliers checked for corruption charges

Question 14

From the following list of costs, calculate the amount of hidden environmental costs.

Accepted Answer

A)  $350 000 
B)  $355 000 
C)  $110 000 
D)  $550 000 
A)  $350 000 
B)  $355 000 
C)  $110 000 
D)  $550 000

Question 15

Which of the following is not a good reason for adding a sustainability perspective on the BSC?

Accepted Answer

A)  Sustainability is considered part of the company's core strategy. 
B)  Sustainability impacts can be captured by the existing four perspectives of the balanced scorecard. 
C)  Sustainability is likely to impact on the company's reputation. 
D)  Resources allocated to sustainability issues by top management are large. 
A)  Sustainability is considered part of the company's core strategy. 
B)  Sustainability impacts can be captured by the existing four perspectives of the balanced scorecard. 
C)  Sustainability is likely to impact on the company's reputation. 
D)  Resources allocated to sustainability issues by top management are large.

Question 16

Define the term 'stakeholder' and explain the role that stakeholders have played in the area of sustainability, highlighting their influence on the organisation.

Accepted Answer

One reason for the growing adoption of s

Question 17

An example of a conventional environmental cost is:

Accepted Answer

A)  equipment to prevent environmental damage. 
B)  provision for potential oil-spill clean up. 
C)  when a firm produces a product that is difficult to dispose of safely. 
D)  lost business because of adverse television publicity. 
A)  equipment to prevent environmental damage. 
B)  provision for potential oil-spill clean up. 
C)  when a firm produces a product that is difficult to dispose of safely. 
D)  lost business because of adverse television publicity.

Question 18

When a business is committed to sustainability they will:

Accepted Answer

A)  implement strategies to become more sustainable. 
B)  strive to achieve a sustainable state. 
C)  ignore positive economic results to achieve sustainability. 
D)  choose sustainability over profitability. 
A)  implement strategies to become more sustainable. 
B)  strive to achieve a sustainable state. 
C)  ignore positive economic results to achieve sustainability. 
D)  choose sustainability over profitability.

Question 19

Environmental management accounting can be further classified into financial, physical and social.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements about environmental management accounting (EMA) is false?

Accepted Answer

A)  EMA analyses environmental costs for use by the firm's internal decision makers. 
B)  EMA does not usually include external environmental costs. 
C)  EMA does not usually include external environmental costs for which the firm is not accountable. 
D)  EMA when combined with triple bottom line reports includes external costs. 
A)  EMA analyses environmental costs for use by the firm's internal decision makers. 
B)  EMA does not usually include external environmental costs. 
C)  EMA does not usually include external environmental costs for which the firm is not accountable. 
D)  EMA when combined with triple bottom line reports includes external costs.

Exam 17: Sustainability and Management Accounting

From the following list, calculate the total environmental external failure costs.

How does environmental management accounting (EMA) differ from traditional management accounting?

Which of the following costs is included in the five tiers of environmental costs?

Why are Tier-2 costs called 'hidden' environmental costs?

KPMG reported that globally 78% of companies worldwide refer to GRI guidelines in their corporate responsibility reports. According to the GRI (G4) guidelines, the product and services aspect would be categorised as:

The Global Reporting Initiative (GRI) Framework is a reporting system that aims to:

Which of the following environmental issues needs to be accounted for in decision making?

When an organisation relates the product value measured in dollars against the resources used this measurement is known as a(n):

Under ISO14031, which of the following is an environmental condition indicator?

Private environmental costs are:

How do environmental issues relate to the strategic decisions of the firm?

From the following list, calculate the total environmental prevention costs.

Under ISO14031, which of the following is an operational performance indicator?

From the following list of costs, calculate the amount of hidden environmental costs.

Which of the following is not a good reason for adding a sustainability perspective on the BSC?

Define the term 'stakeholder' and explain the role that stakeholders have played in the area of sustainability, highlighting their influence on the organisation.

An example of a conventional environmental cost is:

When a business is committed to sustainability they will:

Environmental management accounting can be further classified into financial, physical and social.

Which of the following statements about environmental management accounting (EMA) is false?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters