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Essay on Social Accounting
The concept of social accounting is growing in recognition and sophistication. As it becomes one of the foundations of good practice in Corporate Social Responsibility (CSR), interest is growing within large corporations, consultancies and voluntary organisations alike. If larger companies are using a social accounting methodology to assess their social impact, the question sensibly arises as to whether this is something that can be usefully adopted by those seeking to assess the impact of enterprise development activities.
Social accounting as an approach began developing in the UK in the early 1970s, when the Public Interest Research Group established Social Audit Ltd. This organization carried out, and publicized, investigations into the operations of large public companies, without necessarily gaining their permission or co-operation. Whilst lending support to consumer pressure, there is an argument that this had a negative effect on accountability, as organisations sought to ensure that sensitive information was hidden from such investigations. Globalization has brought with it a wide realization that companies do not operate in isolation, but can have marked impacts on the environment and people at local, national and global levels (Suleiman, 2003). This has led to an increasing awareness of Corporate-Social-Responsibility (CSR), and the “triple bottom-line” of business success – measuring the business not only in its financial performance, but by its social and environmental impact as well.
Social accounting is a way of demonstrating the extent to which an organization is meeting its stated social or ethical goals. Whilst independently verified, the organization itself owns the process of data collection and analysis and the process is driven by indicators the organization sets in consultation with stakeholders, as opposed to being based on standards or criteria determined externally (Suleiman, 2003). This is balanced by the principle of benchmarking, which whilst still developing, should enable organizational comparisons where possible...............
