Social accounting

social accounting

1. SOCIAL ACCOUNTING

2. INTRODUCTION Social accounting is a kind of movement by which everyone can analyze like a business accountant. Expresses its level of social goals to the society

3. Meaning Process of communicating the social effects of organisations economic actions to the society Definition “Social Accounting is the application of double entry book keeping to social economic analysis.” — Kohler

4. Objectives To identify and measure the contribution of a firm towards the society . To determine if the firm’s strategies are consistent with social priorities .   To make available, relevant information about the firm's goals, programmes, performances, use of scare resources . To Quantify and properly present the social costs and benefits of an enterprise.  

5. Scope of Social Accounting Net income contribution Human resource contribution Public contribution Environmental contribution Product or service contribution

6. Features Expression of a company’s social responsibilities . R elated to the use of social resources . E mphasize on relationship between firm and society . Determines desirability of the firm in society . Application of accounting on social sciences . Emphasizes on social costs as well as social benefits . Easy to understand the activities of the firm.

7. Benefits It counters the adverse publicity or criticism leveled It assists management in formulating policies and programmes. The firm proves that it is not socially unethical It acts as an evidence of social commitment. It improves employee motivation . Necessary from the view point of public interest groups , social organisations investors and government. It improves the image of the firm . The management gets feedback on its policies aimed at the welfare of the society. It helps in marketing through greater customer support . It improves the confidence of shareholders of the firm.

8. Social Accounting Approaches Classical Approach: Milton Friedman. The social responsibility of business is to use its resources and engage in activities designed to increase its profits. Descriptive Approach: Social activities of a business are presented along with financial statements in a narrative form . Integral Welfare Theoretical Approach: It advocates the preparation of a social report comprising social benefits and social costs . Social Indicator (Brummet Approach): D ifferent areas of social contribution to be undertaken. Total performance = Net income + Human resource combination + public contribution + Environmental contribution + Product/Service contribution . Linowes operating statement approach: Social contribution = Social benefits – Social costs.

9. CONCLUSION A systematic assessment and reporting on those parts of a company’s activities, which have a social impact . Reporting the information of the social activities of the concern to its users (both internal and external)