Question 2 - Accounting for Sustainability [15 Marks] The world has witnessed the damaging effects of a novel coronavirus (also referred to as COVID-19) since early 2020, leading to the shutting down of many aspects of economic and social life worldwide (Bapuji et al., 2020; Brammer et al., 2020). Although the world has experienced several pandemics from the late twentieth century through to the early twenty-first century, caused by infectious diseases such as Zika fever, Ebola, severe acute respiratory syndrome (SARS), avian flu, swine flu, and Middle East respiratory syndrome (MERS), the COVID-19 pandemic is more lethal with an extensive global spread aided by today's serviceoriented economy, in comparison to previous pandemics (Baker et al., 2020a; Baker et al., 2020b; World Bank, 2020; World Economic Forum [WEF], 2020). For example, the World Bank (2020) predicts that the global economy will shrink by 5.2% in 2020 due to the COVID19 pandemic and that it will also experience the deepest recession since the Second World War. In this continuing economic turmoil, COVID-19 has hugely affected the equity market and most stock indices worldwide have fallen (World Economic Forum [WEF], 2020). For example, Baker et al. (2020a) show that while the Spanish Flu of 1918-1920 triggered daily stock market movements of not more than 2.5%, COVID-19 has triggered these movements 24-fold. Conversely, several financial experts argue that firms with a strong focus on sustainability practices and fair management of stakeholders appear to have outperformed their counterparts that lack this focus (e.g., BlackRock, 2020; Schroders, 2020). Prior studies argue that businesses with a higher level of sustainability performance can alleviate certain aspects of regulatory, legislative, or fiscal actions (Berman et al., 1999; Cheng et al., 2013; Hillman and Keim, 2001) and attract socially conscious consumers (Hillman and Keim, 2001; Rashid et al., 2020) and socially responsible investors (Cheng et al., 2013; Kapstein, 2001). Moreover, firms that are more engaged with their stakeholders through maintaining superior sustainability performance are more visible. The COVID-19 pandemic provides the opportunity to evaluate how firms manage their stakeholders during this crisis as well as how stakeholders behave during this time. For example, Edelman (2020), in a recent survey of 12,000 people in 12 countries, reports that approximately 65% of respondents indicated that their future purchasing decisions would be influenced by the firm's response during the COVID-19 pandemic. Edelman (2020) also finds that 82% of Chinese respondents stated that they moved to a new company as it proved to be innovative and compassionate in its response during the pandemic. Meanwhile, one-third of respondents managed to convince other people to leave a brand that acted inappropriately during the pandemic. Similarly, Just Capital (2020) has developed a tracking system to monitor how the USA's largest employers are treating stakeholders amid the COVID-19 crisis. These examples demonstrate the importance from the firm's perspective of managing stakeholders during this crisis, with investors closely monitoring these developments (Business for Social Responsibility, 2020). [Adapted from Bose, S., Shams, S., Ali, M. J. \& Mihret, D. (2021). COVID-19 Impact, Sustainability Performance and Firm Value: International Evidence. Accounting \& Finance, 10.1111/ acfi.12801] Required: Explain how management accountants can play a significant role in protecting stakeholders' interest in the COVID-19 pandemic. [15 Marks]