Discuss about the Accounting Theory British Petroleum.
As per Tagesson (2014), most of the corporation activities affect the biodiversity or the environment either directly or indirectly. Therefore, this report has been prepared in order to study and understand the direct as well as the indirect impacts of a renowned corporation named British Petroleum Limited on the ecology. Thus, here, a case study on British Petroleum Limited has been studied and analyzed in detail in order to find out the issues related with the firm. It has been found that the particular company mainly has three issues. At first, consequence of oil spill on ocean ecosystem, secondly, lack of ecology services for governing risks and thirdly, lack of regulation sketch for noticing the reinstatement cost.
Depending on the provided case of British Petroleum, it has been noticed that the specified company is not capable to measure its reinstatement cost. As a result of this, the company analyzes this cost with respect to monetary terms. In addition, it has been identified that British Petroleum does not provide much significance to the harm it causes to the environment. Besides, the company counts this as products that cannot be marketed. So, British Petroleum should focus on the same and measure the value. It has been found that the government of the nation counts the firm as liable to pay fine as it causes harm to the ecosystem through causing oil spills, though the company does not portray the total damages done by it clearly (Ball 2016). As a result, the chief intention of preparing this report is to alert the firm British Petroleum regarding the spoils done by it to the environment.
The report mainly deals with the collection of data from both secondary and primary resources, so both primary and secondary as well as qualitative and quantitative analysis will be performed. Telephonic or face-to-face interview (qualitative analysis) and questionnaire survey (quantitative analysis) will be performed here. The secondary resources include – websites, articles and scientific journals.
In order to collect accurate and authentic information, researcher will gather data from the inhabitants of Gulf Coast where oil spills occurred and employees of the company through survey. Nonetheless, both the staffs and the inhabitants of the region might falter to answer the researcher to the survey questions due to the nature of the research (Guthrie and Parker 2014).
Literature Review Consequence of oil spill on ocean ecosystem
Oil spills are a type of pollution and thus all the firms of the petroleum sector should remain alert about this. However, British Petroleum does not portray the damages it done to the environment through oil spills. Moreover, the firm is found to cause more incidental oil spills than accidental oil spills. The later pattern of spill occurs accidentally and thus it is named so, but the former kind occurs due to the carelessness, negligence and ignorance of the employees and management of British Petroleum. Both the types of oil spills affect the ocean ecosystem (environment) directly and this has leaded to increase in mortality rate in marine ecosystem. Therefore, the company should pay the cleanup amount and fine charged by the government, but BP Limited aims to cover all the damages done by it to the ecological wealth (Dull, Schleifer and McMillan 2015). It has been found that ecological damage measurement as well as detection is very difficult, so the corporation measures it with respect to monetary value.
The stakeholders of British Petroleum fully trust on the corporation regarding its moral standards and ethical standards, so it should put steps forward for betterment of the ecological and social wealth (Henderson et al. 2015). Furthermore, British Petroleum should follow all the accounting standards of the environment for making it a trustworthy organization for the stakeholders. These standards will assist the corporation to widen a strong relationship between the organization, environment and ecosystem.
It is a common factor that most of the organizations of oil and petroleum industry break their penalty or fines by the application of political bargaining. However, the application of the political bargaining approach does not help the firm to recover all the damages done by it to the ecosystem. Thus, the organization British Petroleum should imply any process-adjusted structure in order to resolve all the risks associated with its operations. Moreover, it can be said that this particular process is considered as the required one for each firm of the particular sector. It has been found that the “accidental oil spills” generally arise due to collide of autocratic action as this results into featured accounts (Molisa 2014). The unveiled data of a firm is very important for the management department as it helps in estimating the endeavor point for reinstatement cost. Therefore, lack of regulation sketch might affect the corporation negatively, especially in the process of identifying reinstatement cost, so the mentioned approach is important for every organization of the oil and petroleum sector.
Process of Research
In this research work, the researcher will implement primary research process as well as secondary research method. Thus, from both the primary and secondary resources, the researcher will gather data for better analysis. Thus, the researcher will target the people who live in Gulf Coast and the workers of BP Limited for performing questionnaire survey. In addition, secondary data will be gathered from the secondary sources (like – websites, journals and articles).
The researcher will collect information from a fixed sample size of 50 employees and 150 residents of Gulf Coast and this sample will be selected randomly.
The selection of the samples can be done through various techniques, however, in this work, “Probability Sampling Technique” will be used.
Consequence of oil spill on ocean ecosystem
There are various kinds of oil spills that generally take place due to the activity of the organization British Petroleum and the percentages of occurring various kinds are shown below:
Figure 1: Various patterns of Oil Spills and Their Occurrence Percentage
(Source: Bp.com 2017)
In addition to this, it has been found that due to increased percentage of occurrence of oil spills, the mortality rate of the marine ecosystem has also been increased noticeably.
It has been found that the oil spills majorly affect the ocean ecosystem as various kinds of spills take place on a short interval of time. These are:
Figure 2: Main Accidental Spills
(Source: Baker and Burlaud 2015)
As per the data collected from Gulf, it has been came to know that the oil spills chiefly affect the ocean ecosystem, deepwater but it also affect the other parts of the environment.
Figure 3: Influence of Spills
(Source: Freeman et al. 2014)
With the passage of time, the demand as well as the supply of the oil increased, but the workforce, numbers of staffs and contractors started to decrease as the occurrence of oil spills of the firm started to increase. Moreover, the information regarding the budget of Deepwater Horizon has been collected from the organization’s employees and it can be enhanced through the following chart:
Figure 4: Financial Plan of Deepwater Horizon
(Source: Bp.com 2017)
On the other hand, the reinstatement cost can be better explained through the following pie chart:
Figure 5: Lack of Regulation Sketch
(Source: Bp.com 2017)
Here, genuine information has been collected from both the kinds of resources (secondary and primary) and the participants of research survey can keep trust on the researcher of the project as the gathered data will not be unveiled.
Conclusion and Recommendation
It can be concluded that British Petroleum should keep notice on the damages done by it the environment and should implement the accounting standards of environment. Moreover, fines paid by the firm to the government are not enough for improving the harm cause to the ecology.
References
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.
Ball, R., 2016. Why We Do International Accounting Research. Journal of International Accounting Research, 15(2), pp.1-6.
Bp.com. 2017. Bp.com. [online] Available at: https://www.bp.com [Accessed 18 Jan. 2017].
Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia.
Dull, R.B., Schleifer, L.L. and McMillan, J.J., 2015. Achievement goal theory: the relationship of accounting students’ goal orientations with self-efficacy, anxiety, and achievement. Accounting Education, 24(2), pp.152-174.
Freeman, R.J., Shoulders, C.D., Allison, G.S., Smith Jr, G.R. and Becker, C.J., 2014. Governmental and nonprofit accounting: Theory and practice. JPAEJOURNAL OF PUBLIC AFFAIRS EDUCATION VOLUME 20 NUMBER 3, p.441.
Guthrie, J. and D. Parker, L., 2014. The global accounting academic: what counts!. Accounting, Auditing & Accountability Journal, 27(1), pp.2-14.
Henderson, S., Peirson, G., Herbohn, K. and Howieson, B., 2015. Issues in financial accounting. Pearson Higher Education AU.
Molisa, P.B.M., 2014. Accounting for apocalypse: Re-thinking social accounting theory and practice for our time of social crises and ecological collapse.
Tagesson, T., 2014. Accounting reforms, standard setting and compliance. Public sector accounting, pp.8-22.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download
