ACCA Applied Knowledge · Business and Technology · Sustainable business practices
An investor complains that a company's sustainability report lists only its achievements and omits a serious pollution incident that occurred during the year. Which reporting quality is most clearly lacking?
The missing quality is balance. A credible sustainability report must disclose negative performance, such as a pollution incident, as well as achievements. Omitting bad news is selective reporting that misleads users, whereas comparability and timeliness are not the issue described.
- ABalance, because both positive and negative performance should be disclosedCorrect
- BComparability, because prior-year figures are missing
- CTimeliness, because the report was published late
Explanation
Selective disclosure of only good news undermines balance, which requires reporting favourable and unfavourable results fairly. Nothing in the scenario concerns prior-year figures or late publication, so the other options do not fit.
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