Accountants assisting in adding value Snappy Dresser Ltd outsources the production of shirts to a…

Accountants assisting in adding value Snappy Dresser Ltd outsources the production of shirts to a supplier in Indonesia. It believes that one way it can add value to what it does is to improve the health and safety of the employees in the Indonesian factory. Let’s consider how an accountant might assist with this quest to add value. Operationalising the goal The goal of ‘improving the health and safety of the employees in the Indonesian factory’ needs to be operationalised; that is:

• some form of target needs to be aligned with this goal

• some form of account needs to be developed to allow managers to subsequently determine whether the goal has been achieved.

Devising an appropriate performance measure and adding value

The accountant might organise an independent third party with expertise in factory-based health and safety issues to do audits of the factory on a regular basis, and provide a description of what needs to be improved and what has been accomplished since the last site visit. There are many organisations globally that provide such services. To encourage the supplier to take meaningful action, Snappy Dresser Ltd might stipulate that it is a requirement that third-party audits of the factory are done, before it is prepared to start purchasing a new product line of pants from the factory. The site audit reports represent an account of factory health and safety policies, and performance. The accountant will need to devise a system which allows the organisation to make a judgement as to whether the improvements since the last site visit are enough to represent the successful achievement of the project goal.

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