10 Contemporary Issues

Question 1

What us cyber security

Answer 1

The practice of protecting information, systems, and other digital assets from cyber attacks

Question 2

What is data ethics

Answer 2

• 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

Question 3

What are the results of data breaches

Answer 3

• Expensive lawsuits/penalties
• Brand reputational risk

Question 4

What is lifecycle analysis

Answer 4

• 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

Question 5

What is the circular economy

Answer 5

• 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

Question 6

What challenges does the circular economy pose on management accountants

Answer 6

• Effective and efficient resource utilization
• Improve resource productivity and allocation
• Minimize waste
• Provide value for society

Question 7

What is blockchain accounting

Answer 7

• Blockchain is an accounting technology
• It is concerned with the transfer of ownership of assets, and maintaining a ledger of accurate financial information

Question 8

What are cryptocurrencies

Answer 8

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.

Question 9

What are distributed ledgers

Answer 9

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

Question 10

What are the benefits of blockchain accounting

Answer 10

• 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

Question 11

What are the challenges to blockchain accounting

Answer 11

• 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

Question 12

What are the societal sectors

Answer 12

• Government/public sector
• Private or commercial sector
• The non-profit sector (third sector)

Question 13

What is the government/public sector

Answer 13

Taxation revenues, from companies and individuals, are used to provide a range of services in areas such as health, education, social welfare etc.

Question 14

What is the private or commercial sector

Answer 14

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.

Question 15

What is the non - profit or third sector

Answer 15

• 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.

Question 16

What are the managerial problems for non profit organisations

Answer 16

1. Objectives are often ambiguous and hard to measure
2. Objectives are often in conflict with one another and hard to agree on

Question 17

What are non - governmental organisations (NGOs)

Answer 17

• 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

Question 18

What does NGO accountability need to do

Answer 18

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

Question 19

What are the types of NGO accountability

Answer 19

• Internal accountability
• Upwards accountability
• Downward / social accountability

Question 20

What is internal NGO accountability

Answer 20

• 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

Question 21

What is upwards NGO accountability

Answer 21

• 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

Question 22

What is downwards/social NGO accountability

Answer 22

• 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

Question 23

What is social auditing in NGOs

Answer 23

• 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

Question 24

What is self regulation in NGOs

Answer 24

• 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.

Question 25

What are the tensions in NGO accountability

Answer 25

1. Risks of quantification
2. Paradoxes
3. Lack of emphasis on downward accountability
4. Focus on strategic benefits only
5. Power asymmetries

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