Social Accountingassinment

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ICFAI UNIVERSITY DEHRADUN

Name: Satyajeet Chauhan

IUD No: 0901202101

IBS No: 09BS0002101

Course Code: SLAC501

Course Name: ACCOUNTING FOR MANAGERS-1

Faculty Name: Prof. Padma Srinivasan

Date: 10.09. 2009

Topic of the Assignment: SOCIAL ACCOUNTING

Student Signature Faculty Signature


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SOCIAL ACCOUNTING

Social accounting is not any new method of keeping books of account , but a concept

based on evaluating the costs and benefits relating to socially action by business enterprise.

Social accounting (also known AS social and environmental accounting, corporate social

reporting, corporate social responsibility reporting, non-financial reporting, or sustainability

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. both social costs and benefits arise from externalities. Externalities are the benefits or

cost as which are not revived or born by the business responsible for them. An illustration of

an external cost is a factory polluting the surrounding environment and the fact that the

business not incurring any expenditure towards it.

Social accounting is often used as an umbrella term to describe a broad field of research and practice. The

use of more narrow terms to express a specific interest is thus not uncommon. Environmental accounting

may e.g. specifically refer to the research or practice of accounting for an organizations impact on the

natural environment. Sustainability accounting is often used to express the measuring and the quantitative

analysis of social and economic sustainability.

Many factor which can not be translate in to monetary term like

y The moral of staffy Develop and train employeey The contribution of the business to societyy The quality of management

According to sacher committee observes

The company must behave and function as a responsible member of the society just

like any other individual. It can not shun moral values nor can it ignore actualcompulsions. The real need is for some focus of accountability on the part of management

not being limited to shareholder alone the objectives of business proper utilizationcourses for the benefit of others. Profit is necessary ,but is not the primary objective the

company must accept its obligation to be socially responsible and to work for the largerbenefit of the company.


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BASIC PRINCIPLE OF SOCIAL ACCONTING ARE-

y Complete-In order for an accounting report to be considered as socially acceptable, it hasto be complete. This is also a basic principle of accounting as set out by the Accounting

Standards Board

y Embedding-What embedding means is that the company must integrate socialaccounting and corporate social responsibility into everything that it does. Not just

pretending and not just saying that it's going to do it - it must be doing it.

y Continuous Improvement-The final principle must be the one of continuousimprovement, known in business circles as kaizen these days! That is, it's not enough to

be socially responsible and embedded, there must be a desire to improve at all times. To

work up to and beyond the minimum, rather than simply waiting for someone else to

change anything and then changing when they have to.

y Comparability- the basic principle of comparability says that in order for us to be able tomake sense of any accounting report, I need to be able to compare it with last year's. That

is, in order to see whether the company has developed - improved, grown, got worse or

shrunk - I need to be able to calculate things like rates of change ratios and so on. I can't

do that if I can't compare this year's accounts with last year's because they have changed

the layout or headings or something.


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According To San(Social Audit Network) There Are Four Steps

Involve In Social Accounting :-

Planning:

In the first stage of social accounting, the organization clarifies its mission, objectives and

activities as well as its underpinning values. It also analyses its stakeholders through completing

a stakeholder map. These exercises help the organization to make explicit what it does, why

and how it does it, and who it works with and whom it seeks to benefit.

Accounting:

In this phase, an organization decides the scope or focus of the social accounts, especially if it

will build a comprehensive picture over time. The organization then sets up ways of collecting

relevant information over a period of time to report on performance and impact against its values

and its objectives, encompassing both quantitative and qualitative. The information is then

brought together and analyzed.

Reporting and audit:

The information that was collected, collated and analyzed in Step 2 is brought together in a

single document, which serves as a draft of the social accounts. People from outside the

organization (a Social Audit Panel) then review this document to check that the report is based

on information that has been properly gathered and interpreted.When the Panel is satisfied with

the report and its findings, the organization can make its report available to the stakeholders and

wider public in full or as a shorter summary. Social Accounting and Audit is really about

examining the social, environmental and economic performance and impact of an organization.

There are a variety of key terms which are included in the glossary as part of the new, revised

manual.


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OBJECTIVE OF SOCIAL ACCONTING-

K.V.Ramanathan suggest the following objective for social accounting:

1. To identify and measure the periodic net social contribution of an individual firm ,which include not only the measure by the firm , but also those arising from externalities

and affecting different social segments.

2. To help determine whether an individual firm strategy and practices which directly affectthe relative resource And power status of individuals , communities , social segment s

and generations are consistent with widely shared social priority on the one hand

individuals legitimate aspirations on the other and

3. To make available an optional manner to all social constituents relevant information on afirms goals politics programmers , performance to social goals.

ADVENTAGES AND DIS ADVENTAGES OF SOCIAL ACCONTING-

ADVANTAGES-

There is flexibility in the time scale for completing the process and in building up to acomprehensive set of accounts. The full process can be done in stages over two or more years if

the organization focuses on different aspects of its activities or objectives in each year. This is

only recommended if the whole picture will be complete within a reasonable timeframe.

The external validation process can be an important reality check on the information theorganization has gathered.

Having a verified and comprehensive statement of the organizations impact and performancecan help in reporting to funders/investors, reporting to stakeholders and in compiling annual

reports

DISADVENTAGES-

The social accounting process is not particularly useful for benchmarking, as the questions askedand methods for finding the answers are left to each individual organization to decide. However,

there are some organizations that are investigating reporting to a common framework.

Social accounting can be quite labor intensive, especially the first time. If the organization hasnot done basic strategic planning in some time, it can be difficult to progress through the process

rapidly.


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EXAMPLE PF SOCIAL ACCONTING

Below some of the company which are using the social acconting-

1.

ITC2. British petroleum3. Friends provident plc4. The Body Shop

FORMAT OF SOCIAL BALANCE SHEET

ACCOrding to h.m damania suggest that a social balance sheet should be presented in the

following formet

liabilities RS Assets Rs

Organization

equity(balancing fig)

Social equity

contribution by staff

Social capital investment

Township

Building

Canteen building school

equipment

Club equipment

Township roads


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Documents

Social Accountingassinment