10 Contemporary Issues Flashcards
What us cyber security
The practice of protecting information, systems, and other digital assets from cyber attacks
What is data ethics
- Ethics in a Digital World - Big Data and Artificial Intelligence pose unique ethical and security challenges such as,
o Unethical/illegal use of insights
o Perpetuates biases which have social and economic impacts
o Unauthorized use of data/data theft - Public sector lags behind private sector in the use and management of information systems and artificial intelligence
What are the results of data breaches
- Expensive lawsuits/penalties
- Brand reputational risk
What is lifecycle analysis
- Ethical behavior is fundamental to professional conduct in accounting
- Lifecycle analysis of data ethics needed to identify risks and develop mitigating strategies
- Use of blockchain to ensure compliance with ethics
What is the circular economy
- Expected to replace the linear growth model of “take, make, use and dispose”
- It was previously thought that resources are not finite
- This view has changed following environmental pollution, excessive consumption of natural resources and waste generation by companies
What challenges does the circular economy pose on management accountants
- Effective and efficient resource utilization
- Improve resource productivity and allocation
- Minimize waste
- Provide value for society
What is blockchain accounting
- Blockchain is an accounting technology
- It is concerned with the transfer of ownership of assets, and maintaining a ledger of accurate financial information
What are cryptocurrencies
Cryptocurrencies such as bitcoin differ from traditional (‘fiat’) currencies in that their supply is not controlled by a national, issuing, government. They generally operate on a digital peer-to-peer basis with encryption tools being used to ensure that payments occur correctly between the designated source and recipient.
What are distributed ledgers
A distributed ledger is a digital database of records with information relevant to a group of participants within a network (eg showing the value of assets they hold). All participants are looking at a common, shared, view of the records. This view is updated at the same time for all network participants, using a mechanism that achieves consensus among them for approving changes. Cost is considerably low
What are the benefits of blockchain accounting
- Distributed ledgers are considered more efficient, reliable, secure and able to mange a plethora of data
- Improve cash position by better managing receipts
- Potential to reduce the costs of maintaining and reconciling ledgers, and
- Potential to reduce the cost of providing absolute certainty over the ownership and history of assets
- Aid accountants in gaining clarity over the available resources and obligations of their organisations
- Potential to free up resources to concentrate on planning and valuation, rather than recordkeeping
- Rack provenance of goods and services, to reduce costs associated with product and/or food recalls
What are the challenges to blockchain accounting
- Bitcoin and distributed ledgers are not well understood or regulated
- Distributed ledgers could result in Data breach
- Potential for money laundering
- Bitcoins use pseudo-names hence
What are the societal sectors
- Government/public sector
- Private or commercial sector
- The non-profit sector (third sector)
What is the government/public sector
Taxation revenues, from companies and individuals, are used to provide a range of services in areas such as health, education, social welfare etc.
What is the private or commercial sector
Goods and services are produced and traded to make a profit, surpluses of which, if not needed to be kept in the business, are distributed to owners and shareholders.
What is the non - profit or third sector
- Exists to make a difference to society rather than financial profits
- Focus is on creating social wealth rather than material wealth.
- Sometimes referred to as civil society, the third sector, the voluntary and community sector, not-for-profit sector, charity sector, social sector or even beyond profit sector.
- Includes charities, non-governmental organisations (NGOs), trade unions, voluntary and community-based organisations, religious groups, housing associations, mutual societies, political pressure groups etc.
What are the managerial problems for non profit organisations
- Objectives are often ambiguous and hard to measure
- Objectives are often in conflict with one another and hard to agree on
What are non - governmental organisations (NGOs)
- Value-based organisations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development
- Often try to fill in the gaps that governments either will not, or cannot fill.
- Depend, in whole or in part, on charitable donations, institutional funding and voluntary service.
- Have become increasingly professionalised but principles of altruism and voluntarism remain key defining characteristics
What does NGO accountability need to do
Satisfy multiple stakeholders
* For example donors, governments, oversight agencies, communities, beneficiaries, internal stakeholders
* If you needed the help you wouldn’t consider the internal controls to make it efficient you’d just want the extra money while donors would
Be done for a variety of different reasons
* For example, legal requirements, access to funding, adherence to organisational values, allowing the participation of communities
Involve a variety of different mechanisms
* For example, disclosure statements, codes of conduct, self-regulation, participatory monitoring and evaluation, social auditing
What are the types of NGO accountability
- Internal accountability
- Upwards accountability
- Downward / social accountability
What is internal NGO accountability
- Reflects an internal motivation in NGOs to be accountable to themselves for the fulfilment of their own values and mission
- However, internal accountability can be shaped, impacted by or significantly altered by external accountability obligations
What is upwards NGO accountability
- Accountability to financers and direct support
o For example, governments, trustees, foundations, donor NGOs and the general public. - Focuses on the use of donor funds and their immediate impact
- Similar to commercial principal-agent, compliance-based and market-driven forms of accountability and external oversight
- Often called hierarchical or functional accountability
What is downwards/social NGO accountability
- Focuses on the users and those who benefit from the NGO
- Focuses on building trust, understanding and learning relationships with a wider stakeholder audience. Such as, individuals, groups and communities that benefit from the actions of NGOs
- Three elements of Downward Accountability:
o Ensuring NGOs are representative of the views, needs and preferences of beneficiaries
o Allowing beneficiaries to be involved in assessing the effectiveness of NGO activity
o Demonstrating the long-term impact of NGO activities on structural change within communities
What is social auditing in NGOs
- A process where the NGO assesses, reports and improves on its social performance and ethical behaviour
- Different from auditing as traditionally understood within accounting
- Enables the views of a range of stakeholders (such as beneficiaries, donors and NGO employees) to influence organisational goals and values
- Involves (to varying degrees) the following elements: stakeholder identification, stakeholder dialogue, use of indicators and/or benchmarks, and continuous improvement
- Often involves the development of social and environmental information systems
- Can serve as a valuable tool for strategic planning and organisational learning if the information is fed back into decision-making processes
What is self regulation in NGOs
- The NGO sector has developed for itself standards and codes of behaviour allowing it to address its own sector-wide problems (remember the NGO scandals?)
- Often formal, offering visible codes of conduct for NGO behaviour by specifying appropriate, or accountable, behaviour
- Includes standards concerning governance, organisational integrity, finances, public communication and disclosure, management and hiring practices (including promoting gender equity), programs, and public policy involvement.
- Can also provide minimum standards in core development areas such as water supply and sanitation, nutrition, food aid, shelter and site planning, and health services.
- May involve a process compliance assessment, certification or peer review
- Presents numerous opportunities for NGOs not only to better their public image, but also to enhance performance.
What are the tensions in NGO accountability
- Risks of quantification
- Paradoxes
- Lack of emphasis on downward accountability
- Focus on strategic benefits only
- Power asymmetries
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