Social accounting

Social accounting (also known as social accounting and auditing, social accountability, social and environmental accounting, corporate social reporting, corporate social responsibility reporting, non-financial reporting or accounting) is the process of communicating the social and environmental effects of organizations' economic actions to particular interest groups within society and to society at large.[1] Social Accounting is different from public interest accounting as well as from critical accounting.

Social accounting is commonly used in the context of business, or corporate social responsibility (CSR), although any organisation, including NGOs, charities, and government agencies may engage in social accounting. Social Accounting can also be used in conjunction with community-based monitoring (CBM).

Social accounting emphasises the notion of corporate accountability. D. Crowther defines social accounting in this sense as "an approach to reporting a firm's activities which stresses the need for the identification of socially relevant behaviour, the determination of those to whom the company is accountable for its social performance and the development of appropriate measures and reporting techniques".[2] It is an important step in helping companies independently develop CSR programs which are shown to be much more effective than government mandated CSR.[3]

Social accounting is a broad field that can be divided into narrower fields. Environmental accounting may account for an organisation's impact on the natural environment. Sustainability accounting is the quantitative analysis of social and economic sustainability. National accounting uses economics as a method of analysis.[4] The International Standards Organization (ISO) provides a standard, ISO 26000, which is a resource for social accounting. It addresses the seven core areas to be assessed for social responsibility accounting.[5]

  1. ^ R.H. Gray, D.L. Owen & K.T. Maunders, Corporate Social Reporting: Accounting and accountability (Hemel Hempstead: Prentice Hall, 1987) p. IX.
  2. ^ D. Crowther, Social and Environmental Accounting (London: Financial Times Prentice Hall, 2000), p. 20.
  3. ^ Armstrong, J. Scott; Green, Kesten C. (1 December 2012). "Effects of corporate social responsibility and irresponsibility policies" (PDF). Journal of Business Research. Retrieved 28 October 2014.
  4. ^ Ruggles, Nancy D. (1987). "social accounting". The New Palgrave: A Dictionary of Economics. 4: 377–82.
  5. ^ ISO 26000 Social Responsibility Guidance. (2010). (I. T. T. M. Board Ed. 1 ed.).