Accounting theory & Accountability essay on stock exchange
Accounting Theory
SOCIAL AND SUSTAINABILITY REPORTING, Part 1
Learning Objectives
Corporate responsibility
What is meant by social responsibility reporting
Theoretical perspectives on what motivates firms to present social and environmental information
The difficulties in reporting social and environmental issues
Triple bottom line reporting
GRI Index
Research findings
What is meant by Social accounting??
Social accounting is accounting for different things in different media to different individuals for different purposes
Goes beyond financial measurement of economic events
Companies may refer to sustainability, social responsibility
,
The purpose of Social accounting
Purpose of social reporting is to provide:
A comprehensive view of the organisation and resources
A constraint on socially irresponsible corporate behaviour
Positive motivation for corporation
Providing information about social and environmental performance will increase the trust a community has in the organisation
WHAT IS SUSTAINABILITY?
Sustainable Development is ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’ (Brundtland Commission)
WHAT IS SUSTAINABILITY? Cont
Encompasses issues such as
Intergenerational Equity
Intragenerational Equity
Eco-Justice
Eco-Efficiency
These are important national questions but also have siginficant corporate and individual elements.
The Sustainable Entity has a number of concerns
concerned with the following issues:
employees
health and safety
minority and equity issues
community
indigenous peoples
environment
energy use
SUSTAINABILITY REPORTING
A sustainability report refers to a report that not only presents information about the economic value of an entity, but provides information upon which stakeholders can also judge the environmental and social value of an entity.
Useful not only for reporting purposes but also performance measurement, accounting, auditing and reporting.
Benefits of Sustainability Reporting for Companies
Embedding sound corporate governance and ethics systems throughout all levels of an organisation.
Improved management of risk through enhanced management systems and performance monitoring.
Benefits of Sustainability Reporting for Companies Cont
Formalising and enhancing communication with key stakeholders such as the finance sector, suppliers, community and customers.
Attracting and retaining competent staff by demonstrating an organisation is focused on values and its long-term existence.
Ability to benchmark performance both within industries and across industries.
Integrated Reporting
An initiative of the International Integrated Reporting Committee with the aim of
To create a globally accepted integrated reporting framework which brings together financial, environmental, social and governance information in a clear, concise, consistent and comparable format.
To help with the development of more comprehensive and comprehensible information about organizations, prospective as well as retrospective, to meet the needs of the emerging, more sustainable, global economy.
Environmental Reporting
Environmental reporting is a subset of sustainability reporting.
To date, research has not drawn any clear conclusions as to the relationship between environmental performance and environmental disclosure.
Legitimacy theory would propose that entities with poor environmental performance would more likely produce greater levels, or higher quality environmental information to address potential legitimacy threats.
Environmental Reporting Cont
A number of studies however have found a relationship between more extensive quantifiable environmental disclosures and
good environmental performance
good economic performance
An alternative view…
Critical theory
Corporate self interest is the primary motivation behind good deeds
Voluntary disclosure option legitimates self interest and permits exploitation
The End