KMBN-103

1. CORPORATE SOCIAL RESPONSIBILITY
ACCOUNTING
PRESENTED BY:
VIKASH BARNWAL
ASSISTANT PROFESSOR
KASHI INSTITUTE OF TECHNOLOGY

2. INTRODUCTION
• SOCIAL ACCOUNTING, ALSO KNOWN AS SOCIAL RESPONSIBILITY ACCOUNTING,
IS A PART OF AN EVOLVING CORPORATE REPORTING SYSTEM THAT ASSESSES
AND TAKES RESPONSIBILITY FOR THE COMPANY’S EFFECTS ON THE
ENVIRONMENT AND ITS IMPACT ON SOCIAL WELFARE.
• IT IS A CONCEPT THAT HAS BEEN INTRODUCED TO BETTER ARTICULATE THE
MEASURES THAT CONTRIBUTE TO LONG-TERM VALUE AND THE ROLE
ORGANISATIONS PLAY IN SOCIETY. IT IS ALSO A SUBSET OF THE TRIPLE BOTTOM
LINE ACCOUNTING FRAMEWORK WHICH EMPHASISES THREE DIMENSIONS OF
PERFORMANCE: SOCIAL, ENVIRONMENTAL AND FINANCIAL. IT GOES BEYOND
THE PROFIT MOTIVE OF BUSINESSES AND FOCUSES ON SUSTAINABLE
DEVELOPMENT.

3. DEFINITIONS
KOHLER DEFINED SOCIAL ACCOUNTING AS ”THE APPLICATION OF DOUBLE-ENTRY
BOOK-KEEPING TO SOCIO-ECONOMIC ANALYSIS”.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA OR THE ICAI DEFINED IT
AS “SOCIAL ACCOUNTING IS A WAY OF MEASURING, UNDERSTANDING, REPORTING
AND ULTIMATELY IMPROVING AN ORGANIZATION'S SOCIAL AND ETHICAL
PERFORMANCE”.
RICHARD DOBBINS AND DAVID FANNING DEFINED IT AS “THE MEASUREMENT AND
REPORTING OF INFORMATION CONCERNING THE IMPACT OF AN ENTITY AND ITS
ACTIVITIES ON SOCIETY”.

4. FEATURES OF SOCIAL ACCOUNTING:
• (I) SOCIAL ACCOUNTING IS AN EXPRESSION OF A COMPANY’S SOCIAL
RESPONSIBILITIES.
• (II) SOCIAL ACCOUNTING IS RELATED TO THE USE OF SOCIAL RESOURCES.
• (III) SOCIAL ACCOUNTING EMPHASIZE ON RELATIONSHIP BETWEEN FIRM AND
SOCIETY.
• (IV) SOCIAL ACCOUNTING DETERMINES DESIRABILITY OF THE FIRM IN SOCIETY.
• (V) SOCIAL ACCOUNTING IS APPLICATION OF ACCOUNTING ON SOCIAL
SCIENCES.
• VI) SOCIAL ACCOUNTING EMPHASIZES ON SOCIAL COSTS AS WELL AS SOCIAL
BENEFITS.

5. NEED/BENEFITS OF SOCIAL ACCOUNTING:
• (1) A FIRM FULFILLS ITS SOCIAL OBLIGATIONS AND INFORMS ITS MEMBERS, THE
GOVERNMENT AND THE GENERAL PUBLIC TO ENABLES EVERYBODY TO FORM
CORRECT OPINION.
• (2) IT COUNTERS THE ADVERSE PUBLICITY OR CRITICISM LEVELED BY HOSTILE
MEDIA AND VOLUNTARY SOCIAL ORGANISATIONS.
• (3) IT ASSISTS MANAGEMENT IN FORMULATING APPROPRIATE POLICIES AND
PROGRAMMES.
• (4) THROUGH SOCIAL ACCOUNTING THE FIRM PROVES THAT IT IS NOT SOCIALLY
UNETHICAL IN VIEW OF MORAL CULTURES AND ENVIRONMENTAL
DEGRADATION.

6. • (5) IT ACTS AS AN EVIDENCE OF SOCIAL COMMITMENT.
• (6) IT IMPROVES EMPLOYEE MOTIVATION.
• (7) SOCIAL ACCOUNTING IS NECESSARY FROM THE VIEW POINT OF PUBLIC
INTEREST GROUPS, SOCIAL ORGANISATIONS INVESTORS AND GOVERNMENT.
• (8) IT IMPROVES THE IMAGE OF THE FIRM.
• (9) THROUGH SOCIAL ACCOUNTING, THE MANAGEMENT GETS FEEDBACK ON ITS
POLICIES AIMED AT THE WELFARE OF THE SOCIETY.
• (10) IT HELPS IN MARKETING THROUGH GREATER CUSTOMER SUPPORT.
• (11) IT IMPROVES THE CONFIDENCE OF SHAREHOLDERS OF THE FIRM.

7. TYPES OF SOCIAL ACCOUNTING

8. • ENVIRONMENTAL ACCOUNTING: IT PROVIDES INFORMATION ABOUT THE IMPACT ON
THE NATURAL ENVIRONMENT. IN OTHER WORDS, IT CAN PROVIDE INFORMATION
REGARDING HOW AN ORGANIZATION’S ACTIVITY IMPACTS LAND, SOIL, CLIMATE
CHANGE, AIR, CHANGE IN WATER, REDUCTION IN NATURAL RESOURCES SUCH AS
COAL, ZINC, PETROL, GAS, ETC.
• SUSTAINABILITY ACCOUNTING : ALSO KNOWN AS CORPORATE SOCIAL
RESPONSIBILITY, IT PROVIDES SOCIAL AND ECONOMIC SUSTAINABILITY
INFORMATION. IT DIRECTLY IMPACTS SOCIETY, THE ENVIRONMENT, AND THE
ECONOMIC PERFORMANCE OF AN ORGANIZATION. FOR EXAMPLE, USING MATERIALS
THROUGH THE RECYCLING PROCESS CAN HELP BECOME MORE SUSTAINABLE.
• NATIONAL ACCOUNTING : IT REFERS TO ACCOUNTING TECHNIQUES THAT ANALYZE
THE ECONOMIC ACTIVITY OF A NATION. IT ANALYSES THE TOTAL EXPENDITURE
INCURRED BY THE COUNTRY TO PERFORM A BUSINESS ACTIVITY. FOR EXAMPLE, A
GOVERNMENT HAS TO RECORD ITS SPENDING ON EACH PROJECT TO AVOID MISUSE.
APART FROM THE REGULAR AUDIT, THEY CONDUCT SPECIAL AUDITS TO KNOW IF
THERE IS ANY MISUSE OF EXPENSES.