Question 1 (5 marks)

You run a company that provides recycling services to local councils. You are finding that it is a very

competitive industry in which to work due to the high costs of separating goods and then processing

them in each of your plants.

One of your plants has been accused of polluting a local water way with waste run off from your

factory. The EPA (Environmental Protection Authority) conducted an audit of the area and you were

found to be non-compliant.

A portion of your waste is particularly dangerous and you have not been able to dispose of it legally

for some time due to the high costs you would incur. Whilst you know you need to dispose of the

backlog if you pay for the correct disposal method the cost will be significant and will run the business

very short of cash. Additionally, you will not be able to achieve the desired profit expected by your


Unfortunately, where your run-off has entered the water way flows into a local swimming spot and

many swimmers have suffered serious health consequences that have been traced to your waste.

There is a possibility that some people may have ongoing health issues. The potential legal

consequences and compensation to those parties injured by your company’s actions are currently

unknown, however you are likely to be liable for a substantial amount given the type of chemical and

its potential consequences.

Given the resulting consequences, do you think reducing nature to a number is beneficial to the

environment and accounting? Discuss giving consideration to at least 2 cases and relate them to

your business. Your answer needs to be in your own words and correctly referenced to receive full


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