Interest Theory and what of the Role of Regulators

Question: Discuss about the Interest Theory and what of the Role of Regulators. Answer: Introduction: The environment, ecosystem on the earth and the biodiversity is directly and indirectly impacted by the operations of the organization. In the given case study, the operational process of the mining firm named British Petroleum Limited has been discussed. It is clearly depicted in the case study that the firm is directly causing and damaging the ecosystem. There are three issues concerning the British petroleum on the basis of the case study. The entire marine ecosystem is entirely affected by the oil spill and secondly there is an obstruction in identifying the restoration expense. This is mainly due to the lack of the doctoral process of the firm. The third and the last issue faced by the organization is that there is lack of incorporation in the services of the ecosystem in the procedure of managing the risks of the firm (Al-Htaybat et al. 2013). The report is prepared for the assessment of the harmful impacts on the ecosystem and environment of the BHP Billiton. Report objective: There is incapability on part of BHP Billiton in the identification of the restoration expense as per the case study. As a result of this, the organization is measuring the harms caused to the ecosystem and biodiversity due to its operations using the monetary value. However, it is facing difficulty in measuring the social damage caused as it does not take account of the ecological loss and wealth as an important factor. For calculating the valuation of the damage caused by the oil spills, it is required by the company to have huge attention. This is so because oil spills are regarded as the non-marketed goods. British government has made BHP Billiton liable for bearing the expenditures and the cost of cleaning up the damage that resulted from the oil spills (Baker and Burlaud 2015). Nevertheless, it was not clearly portrayed by the British Petroleum about the harms that is caused to the social and ecological wealth (Groot and Selto 2013). In light of the above mentioned facts taken from the case study, the objective of the report is to make the organization well acquainted about the damages it caused to the social and ecological wealth because of oil spills. Issues identified and their importance: There are three issues identified and discussed in detailed and they are as follows: Obstruction in the process of identifying the restoration expense due to the lack of dictatorial framework of the government. Oil spill impact on the entire marine ecosystem Lacking of the biodiversity and the incorporation of the ecosystem in the procedures of managing the risk of the organization. Research methodologies: Researchers can discuss the above mentioned issues in details by collecting the various data and the required information from the secondary and the primary sources. In conducting the primary research, the research has to collect the data directly from the field of enquiry that is telephonic interview or the face-to-face questionings (Baxter 2014). The questionnaire forms the basis of the qualitative interview and there can also be the qualitative analysis provided by other means. Assumptions and constraints: While conducting the research, the researchers can gather the information from the perception of the residents and the locality in the area of the operations of the BHP Billiton. Information can also be collected from the BHP Billiton employees by performing the survey and conducting the feedback. Few constraints would also be faced by the researcher in carrying out the research. This would include the process of collection and irrelevant data provided by the employees, which may not be the representative. Participation in the survey conducted by the researcher, the employees might also face the dilemma. Discussion: Effect of the oil spill on the entire marine system: Oil spill is the man made damage that hamper the environment and is regarded as one kind of pollution. Incidental and accidental are the two types of the oil spill damage that can occur. Accidental spills are caused accidentally and on the other hand, the incidental spills are those which occur due to ignorance and it is due to the carelessness, ignorance and negligence. Oil spills are considered as overwhelming because of its direct influence of the ecosystem of the marine life system. Therefore, it is liable on the part of the BHP Billiton to bear the expenses concerning the cleaning up of the water. However, the firm is not willing to disclose the damage caused to the environment and the ecosystem because of their own fault. Becker et al. (2014) stated that the damage caused to the loss of the oil spills faced with the difficulty in quantifying. In the case study presented, the organization is valuing the loss cased in terms of money and value. Moreover, this valuation also does n ot reveal the exact damage caused to the environment. The various issues faced by the organization is mainly due to the fact that there is no perfect basis of measurement for valuing the loss or the damage caused to the services and the goods due to spill. Procedure for managing the risks of BHP Billiton lacks incorporation of ecosystem: The shareholders trustworthiness of the shareholders is reflected in the ethical standard and the morale of the British Petroleum. Therefore, it is the responsibility of the organization to be liable for preserving the social and ecological wealth of the environment and ecosystem. In addition to this, the environmental reporting and the standards of accounting should be incorporated into the business activities of the corporations. This would help them in making the responsible reporting towards the stakeholders. The association among the employees, corporate system, ecosystem and environment is impended by customizing the standards of environmental accounting (Penman 2013). The preparation of the standard of the environmental accounting is regarded as a crucial factor because the operations of the various business activities has the negative impact on the environment. In order for the business to run successfully and continuously, environmental accounting standards should be incorpo rated within the reporting of the various business activities. Issues in identification of the restoration expense: With the help of process of political bargaining, the penalties scale of the most of the petroleum companies are cracked for the damaging of the social and ecological wealth. However. The process is not regarded as accurate. For the evaluation of the related risk, it is mandatory by the organization according to the process oriented structure. In addition to this, this particular process also helps in alleviating the obstacles in a perfect manner. There is a need for the specified approach to shift to the procedures from the regulators. Main reason attributable to the oil spill by the BHP Billiton Limited is the failure of the dictatorial agency in order to serve the account of the ecosystem in detail. The crucial factor in judging the effort for scaling up the procedures of the restoration of the economic and ecological properties is revealed by the data (Quinn 2014). These are shortly impaired. Identification of the expense concerning restoration is damaged due to the lack of the d ictatorial firm. Therefore, there is a need for incorporation of the procedure oriented structure. Methodology Procedures: Research process will get incorporated into the primary and the secondary methodologies. The data from the employees will be collected by distributing the questionnaires among the participants that is the employees of the British Petroleum and the localities of the Gulf. When collecting the secondary research, the information will be collected from the secondary source that is journals, articles and websites of the firm (Craig and Michaela 2014). Size of sample: In conducting the research, a fixed sample size of 120 inhabitants of the Gulf localities sand residents and 60 staffs of Employees of British petroleum are selected randomly. This would help in the perfect and easier computation of the analysis. Selection criteria: The analysis of the research questions of the study conducted, simple technique of random sampling is considered by the researcher. Under the study conducted here, the researcher has highlighted the probability sampling technique in order to carry to the research. Analysis of data: Oil spill impact on the ecosystem: On the basis of the information gathered from the employees of the British petroleum, it has been depicted that there are various types of oil spills that is caused by the operating activities of the business. Figure 1: Different types of oil spills (Source: Baxter 2014) As depicted by the chart above, there are various types of the oil spills caused by the operations of the different organization. The chart also depicts the percentage. The impact of the oil spill on the environment can be understood in a better way using this. Managing the risk of the BHP Billiton: The accidental spills occurring in the ocean is due to the lack of the services of the ecosystem that helps in the risk management. It can be represented by the following chart. Figure 2: Major Accidental Oil Spills (Source: Rogers and Van 2013) It has been found from the data gathered from the inhabitants of the Gulf residents that the moratorium of deep water is chiefly influenced by the oil spills (Dyckman and Zeff 2015). The following graphs depicts the rating of the other influences of the oil spills. Figure 3: Oil spills influence: (Source: Hahn and Khnen 2013) Restoration expense identification: Based on the oil demand and the data gathered from the employees of the BHP Billiton Limited, it is depicted by the graph the rise in the supply of oil. Figure 4: Supply and demand of oil: (Source: Beams et al. 2015) It has been depicted from the information gathered from the employees of the staffs the various process solves the level of damaging the ecological and social. This is implemented by the process of collective bargaining. Restoration expense is identified by the pie charts that depicts the lack of dictatorial frame of the organization. Figure 5: Lack of Dictatorial Frame (Source: Van Mourik 2014) Accuracy of data: The study has been performed by gathering the accurate data from the primary and the secondary resources. Researcher has also used the collected information for the rationale. Information collected and the data gathered will not be used by the researcher. Participants can place their trust on the researcher and their individual belief would not be revealed. Recommendation: It is recommended for the BHP Billiton Limited to incorporate and adopt the accounting standards in its environmental reporting. Organization also needs to revise its standards of sustainability reporting so that several measures are taken to preserve the biodiversity. Considering the oil spills, it should also take remedial measures for biodiversity protection. Conclusion: From the above detailed discussion and analysis of the oil spill damages caused by the BHP Billiton and the reportings of the accounting , it can be concluded that the organization needs to be prepared for facing and bearing the loss caused by the damages. The incidental oil spills of the organization has the negative influence on the social and ecological wealth and it has also been due to the negligence of staffs. In addition to this, it is also concluded that amount of fines paid by the firm to the government are not satisfied or compensating the loss made by the organization to the environment. Reference: Al-Htaybat, K. and von Alberti-Alhtaybat, L., 2013. Management Accounting Theory Revisited: Seeking to Increase Research Relevance.International Journal of Business and Management,8(18), p.12. Baker, C.R. and Burlaud, A., 2015. The historical evolution from accounting theory to conceptual framework in financial standards setting.The CPA Journal,85(8), p.54. 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