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Journal of Finance and Accounting 2019; 7(2): 32-39

http://www.sciencepublishinggroup.com/j/jfa

doi: 10.11648/j.jfa.20190702.11

ISSN: 2330-7331 (Print); ISSN: 2330-7323 (Online)

Potentials of Applying Social Responsibility Accounting in the Banking Sector in Lebanon: An Empirical Study

Hasan El-Mousawi 1 , Hussein Trabulsi

2

1 Accounting Department, Lebanese University, Beirut, Lebanon

2 Economics Department, Lebanese University, Beirut, Lebanon

Email address:

To cite this article: Hasan El-Mousawi, Hussein Trabulssi. Potentials of Applying Social Responsibility Accounting in the Banking Sector in Lebanon: An

Empirical Study. Journal of Finance and Accounting. Vol. 7, No. 2, 2019, pp. 32-39. doi: 10.11648/j.jfa.20190702.11

Received: March 4, 2019; Accepted: April 13, 2019; Published: May 15, 2019

Abstract: Universal interest in organizations’ role and their impact on society and rising prospects of investors, consumers, employees and local communities about the importance of this role and its impact on society, which made many governments,

non-governmental organizations and local communities seek more transparency and accountability; provided that it is not

limited to daily operations of organizations of any nature, but it should include the extent of impact those operations have on

society. This research aimed at shedding light on the concept and importance of social responsibility accounting and

determining the extent of applying it in Lebanese banks in order to deal with the deficiency in outputs of the accounting

system, which is reflected in financial statements, by including information about social responsibilities and revealing the

impact of disclosing it in financial statements. To achieve the goals of the research, a questionnaire has been devised to be

distributed among employees in the middle and high administrations (managers, heads of accounting departments and

employees of the accounting department) in Lebanese banks, where 200 questionnaires were distributed in the banks. The

Statistical Package for Social Sciences (SPSS) was used to make various statistical tests to analyze the outputs in order to reach

results and present recommendations which may be good to approach the deficiency in outputs of the accounting system. The

research yielded some important findings, mainly that managements of banks in Lebanon are aware of the concept of social

responsibility; however, managements of banks in Lebanon do not develop relations with the local community except in

certain domains.

Keywords: Social Responsibility Accounting, Lebanese Banks, Financial Statements

1. Introduction

Recently, the issue of social responsibility accounting has

been viewed as the most in accounting development as a

result of the increase in size and activities of economic units

which have vast financial, economic, social and

environmental impacts. Since accounting is a social career

which accompanies social and economic changes, it was

imperative for the accounting mind to promote in order to

respond to these changes. One of the results of this response

is the emergence of social responsibility accounting, which

studies and analyzes the social impact of a project on the

society where it operates and conveys this information to

relative parties to increase efficiency of decision-making.

Evaluation of an organization’s performance is no longer

limited to financial indications, but it extends to reach

nonfinancial indications, which include social indications.

The extent of its success is limited to the extent of its

contribution to achieving sustainable development and

keeping its social obligations.

The concept of social responsibility accounting is still

deficient in Lebanon; consequently, this study came to

convey the potentials of applying social responsibility

accounting (SRA).

2. Literature Review

Although corporate social responsibility (CSR), also

typically known as social responsibility accounting (SRA),

has been subject to great debate and analysis from around the

middle of the twentieth century, the available literature about

33 Hasan El-Mousawi and Hussein Trabulssi: Potentials of Applying Social Responsibility Accounting in the

Banking Sector in Lebanon: An Empirical Study

it is unreliable and confused [1-2]. Mathews [3] defines the

concept of Social Responsibility Accounting as the

organization’s voluntary disclosure of information aimed at

influencing or informing its audiences. Mook et al. [4],

defined social responsibility accounting (SRA) as social

accounting that can be issued by any organization including

information that permits stakeholders to monitor the

organization's performance in dealing with both positive and

negative social issues. This makes way for social

responsibility accounting (SRA) to determine and measure

the net social contribution of the firm periodically.

However, some researchers say that thoughts, methods and

procedures according to principles of SRA don’t allow

organizations to be profitable. An organization is thought to

best contribute to its society by gaining greater profits and

economic growth, not by executing humanitarian actions [5].

One of the earliest definitions of SRA is that it reports on a

feature of the organization’s social activities, whether it be on

its performance or on an effect [6].

Social Responsibility Accounting is usually used in

business although any given organization of any type may be

engaged in social accounting. Such organizations may

include government agencies, non-governmental

organizations, or even charities. For organizations to take

their social responsibilities, they should work in a legislative

environment which identifies and summarizes corporate

duties for societies [7]. Waddock [8] affirmed that the SRA is

the subgroup of corporate responsibilities which deals with

an organization’s optional relationships with its society

stakeholders and hence is normally undertaken with some

target to improve an important feature of society or

relationships with non-governmental organizations (NGOs)

or other non-profit communities. Therefore, it would be

essential to accelerate the passing of laws to oblige industrial

organizations to take their responsibility and to issue

accounting standards [7]. It is necessary to improve the

standards of transparency and disclosure to comprise

disclosure of environmental pollution decrease costs as one

of the main essentials of the concept of social accounting [9].

An organization can not exclusively satisfy the needs of

investors. There are other people or groups who have an

influence on the organization. In addition, the organization

has an influence on these groups, which are the stakeholders

[10]. Stakeholders may be clients, societies, employees, trade

organizations, providers, governments, and political groups.

The organization has a direct moral responsibility to some

stakeholders to attend to their well-being [11].

There is an idea of a social contract or an agreement

between the company and its stakeholders [12]. The

organization has the choice of disclosing the information,

which will be in agreement with the stakeholders’ prospects.

If the activities undertaken by the organization are

acceptable, then the organization will be seen as legitimate

and can get permission to operate [5]. The prospects in

communities change with years and organizations should

respond to their moral environment as norms change [13].

A company should have two required components that

must be achieved for Social Responsibility Accounting,

mainly that it must employ its proficiency in corporate social

responsibility work and that the goal it is trying to achieve is

fundamental to be performed [5]. When an organization gives

value to its clients and its society, it becomes noticeable

which also give back value to the organization and its

owners. Therefore, it should be prepared to supply solutions

when there is communication with stakeholders to be viewed

as legitimate [5].

At an early phase, research published on Corporate Social

Responsibility was mainly descriptive and/or empirical

which mainly referred workers, products, and environmental

factors, all of which were minor [14, 15]. There were two

noteworthy improvements from thence. The first is the

development of reporting to include social issues and others,

and the second is the separate reports which organizations

used to disclose SRA information [16]. In spite of the many

attempts to find what enhanced organizations to disclose

information about corporate social responsibility or to create

models which advance Social Responsibility Accounting

disclosure, the relative literature remains below the required

level [15].

Close to the end of the twentieth century, there existed an

augmentation in the distribution of social and environmental

information, whether it be in annual financial reports or in

separate reports which were produced especially for that

purpose [12, 17]. All of this resulted in an increase of

researches which analyzed social information which

companies disclosed [18, 19].

Although concepts of Social Responsibility Accounting are

varied, the researchers conclude that the comprehensive

definition of SRA is that it is a group of activities for

measuring and analyzing social performance of business

organizations and disclosing this information to the relative

parties to help them in making decisions and evaluating the

social performance of those organizations. This definition

reveals the interest of SRA in measuring social performance

and reporting the results to evaluate the social performance

of any organization.

3. Domains of Social Responsibility

Accounting

There have been numerous attempts to identify activities

relative to SRA for organizations which should be included

into accounting interests, and there have been diverse trends

in determining these activities and classifying them into four

main domains of social performance done by the National

Accounting Association in America (NAA) as follows [20]:

Interaction of the organization with society.

Contribution to developing human resources.

Contribution to developing natural and environmental

resources.

Leveling up the standard and quality of services and

products.

The American Institute of Certified Public Accountants

Journal of Finance and Accounting 2019; 7(2): 32-39 34

also defined domain proportions for social performance,

including [21]:

Environment

Human resources

Non-renewable resources

Suppliers

Clients

Society

In addition, the American Accounting Association (AAA)

had conducted a field study involving certain organizations

which prepare social reports to know the principles followed

in measurement and disclosure. It issued a report which

included five domains of social responsibility as follows:

Control over the environment

Employing minorities and special needs

Employees

Improving products

Community service

Consequently, the basic goals of social responsibility

accounting is to supply information and prepare social

reports which reflect the extent of the organization’s

commitment to disclosure of social performance regardless

of internal or external obstacles which might affect the

comprehensiveness of the disclosure to reach the main aim

behind preparing the report, which is mainly for all users to

benefit from it in decision making relative to investments; in

addition to using the proper and accurate measurement for

social costs of the organization and following the regular

standards in determining the costs of it social activities.

4. Research Problem and Hypotheses

The research problem is summarized in the disconcern of

economic organizations in disclosing social responsibility in

financial statements and in organizations’ unawareness of its

importance; consequently, nor knowing its impact on

decisions of financial statements’ users. Based on this, the

research problem lies in answering the following questions:

How much awareness do banks have about the concept of

social responsibility?

Do banks in Lebanon apply social responsibility

accounting?

Is there a relation between disclosing social responsibility

and decisions of financial statements’ users?

Do managements of banks in Lebanon develop relations

with the local community?

Based on the research problem and the questions above,

the researchers have four hypotheses to be discussed and

proved or disproved:

H1: Managements of banks are not aware of the concept of

social responsibility.

H2: Banks in Lebanon do not have the potentials to apply

social responsibility accounting.

H3: Applying social responsibility accounting does not

affect the quality of financial reports.

H4: Managements of banks in Lebanon do not develop

relations with the local community.

5. Procedures and Methods

5.1. Population and Sample Selection

The population of the study consists of employees of

different positions (managers, heads of accounting

departments and employees at the accounting departments)

of banks listed in the stock market operating in Lebanon. The

study was limited to a random sample of 200 employees of

the above mentioned. Only 147of the distributed

questionnaires were retrieved, of which 138 questionnaires

were valid for analysis.

5.2. Instrumentation

The researchers constructed a Likert Style five-point scale

and asked the employees of different positions (managers,

heads of accounting departments and employees at the

accounting departments) in banks listed at the stock market

operating in Lebanon to respond to the 40 items of the

questionnaire distributed to four domains as follows in table

1:

Table 1. Domains of the Questionnaire.

Domains Number of items

First Domain: Awareness of Social Responsibility 6

Second Domain: Aspect of Applying Social Responsibility Accounting 13

Third Domain: Impact of Social Responsibility Accounting on Quality of Financial Reports 6

Fourth Domain: Importance of Developing Relation with Local Community 15

Total items 40

The scale ranges as follows:

Table 2. Extent of Agreement.

Answer Strongly agree Agree Neutral Disagree Strongly disagree

Degree 5 4 3 2 1

Since the five-point Likert Scale was used in designing the

tool of the study, the research adopts the standard illustrated

in the following table to judge the inclination of each item

when using the Likert Scale, mainly depending on the mean

value and relative weight to determine the extent of consent

to the items an domains of the questionnaire.

35 Hasan El-Mousawi and Hussein Trabulssi: Potentials of Applying Social Responsibility Accounting in the

Banking Sector in Lebanon: An Empirical Study

Table 3. Likert Scale Results.

Approval level Very low Low Medium High Very high

Mean < 1.8 1.8- 2.59 2.6- 3.39 3.4- 4.19 > 4.2

Relative weight < 36% 36%- 51.9% 52%- 67.9% 68%- 83.9% > 84%

This gives statistical significance that averages which are

less than 1.8 show very low consent to the item or the

domain as a whole, and averages ranging between 1.80 and

2.59 show low consent to the item or the domain as a whole.

Whereas averages between 2.60 and 3.39 indicate medium

consent of the members of the sample to the item or the

domain as a whole. Averages between 3.40 and 4.19 show

high consent to the item or the domain, and averages higher

than 4.20 show very high consent to the item or the domain

as a whole.

5.3. Reliability of the Study Tool

Findings of the current study show that Cronbach’s Alpha

of the questionnaire was 0.698, while the split-half test result

was 0.576. This shows that the items of the questionnaire

were reliable; thus, the data can be analyzed and generalized

on the population of the study. The following table illustrates.

Table 4. Cronbach’s Alfa and Split-Half Results.

Domains Cronbach's Alpha Split-Half

No. of Items Cronbach's Alpha Correlation Between Forms Guttman Split-Half Coefficient

All Questionnaire 35 .698 .576 .730

Normal Distribution of data is considered an important

condition to using parametric tests. However, if the sample is

more than 30 items, the normal distribution test can be

overlooked according to the central limit theory.

6. Data Analysis and Discussion

First: Statistical distribution of the study sample

(1). Distribution of the study sample according to

academic qualification

The following table shows distribution of the study sample

according to academic qualification, in which it is evident

that 58.7%(81 people) of the sample have a Bachelor’s

Degree, while 41.3% (37 people) of the sample have a

Masters Degree.

Table 5. Distribution of the study sample according to academic qualification.

Education Frequency Percent

Bachelor 81 58.7

Master 57 41.3

Total 138 100.0

(2). Distribution of the study sample according to major

The following table shows the distribution of the study

sample according to their major. It is evident that 37.7% (52

people) of the sample are majored in accounting, 13% (18

people) economics, 39.1% (54 people) business

administration and 10.1% (14 people) banking and finance.

Table 6. Distribution of the study sample according to major.

Major Frequency Percent

Accounting 52 37.7

Economics 18 13.0

Business administration 54 39.1

Banking and Finance 14 10.1

Total 138 100.0

(3). Distribution of the study sample according to years of

experience in accounting practice

The following table shows the distribution of the study

sample according to years of experience in practicing

accounting. It is evident that 18.8% (26 people) have less

than 5 years of experience in practicing accounting, 10.9%

(15 people) have 5 to 10 years of experience in practicing

accounting, 35.5% (49 people) have 10 to 15 years of

experience in practicing accounting, 34.8% (48 people) have

more than 15 years of experience in practicing accounting.

Table 7. Distribution of the study sample according to years of experience in accounting practice

Years of experience Frequency Percent

0 – 5 years 26 18.8

5 – 10 years 15 10.9

10-15 years 49 35.5

15 years and above 48 34.8

Total 138 100.0

Journal of Finance and Accounting 2019; 7(2): 32-39 36

(4). Distribution of the study sample according to their job

position.

The following table illustrates the distribution of the

sample according to their job position. It is evident that

30.4% (42 people) are managers, 15.2% (21 people) are

heads of departments, and 54.3% (75 people) are employed

at the accounting departments of their banks.

Table 8. Distribution of Sample According to Job Position.

Job Position Frequency Percent

Manager 42 30.4

Head of department 21 15.2

Managerial employee 75 54.3

Total 138 100.0

Second: Results of analyzing domains of the study and

testing its hypotheses.

(1). Analyzing results relative to the first domain:

Awareness of Social Responsibility

The following table shows results of the statistical analysis

of items in the first domain, Awareness of Social

Responsibility, where the mean, standard deviation, relative

weight, level of approval and order of each item were

calculated. Also, the One Sample T-Test was used to

determine the relevance of the responses to the value (3)

which reflects neutrality.

Table 9. Statistical Analysis of Items in the First Domain

No Items Mean Std. Dev Rel.

Weight T-test Sig

Approval

level Order

1.

The sole responsibility of the project is production of goods

and services in order to gain profit and contribute to the public

well-being.

1.55 .705 31.0% 24.140 .000 Very low 6

2.

Social responsibility is a form of social solidarity which

depends on good initiatives from companies with the absence

of legal obligation measures.

4.43 .578 88.6% 29.012 .000 Very high 5

3.

The social impact of a project’s economic activities makes it

socially responsible, being an operating economic unit

(responsibility for social impact of economic activity).

4.49 .595 89.7% 29.338 .000 Very high 2

4.

Social responsibility is the commitment of owners of

economic activities in contributing in sustainable development

by working with the local community to improve people’s

standard of living in a way which serves both economy and

development simultaneously.

4.46 .581 89.1% 29.452 .000 Very high 3

5.

Social responsibility of organizations is its mechanism through

which social, environmental and economic interests and issues

merge in making decisions and strategies.

4.44 .616 88.8% 27.487 .000 Very high 4

6.

The presence of the ethical investor concept and the socially

acceptable project increases the importance of measuring

social performance.

4.52 .582 90.4% 30.706 .000 Very high 1

All Items 3.98 .356 79.6% 32.384 .000 High

The first hypothesis states: Managements of banks are not

aware of the concept of social responsibility. The mean for

the sample study responses for all items of the first domain,

Awareness of Social Responsibility, is 3.98 out of 5. This is

higher than the neutral value (3); and the value of calculated

T test equals to 32.384, which is higher that tabulated T at the

significance level 1%. This means that there is an addition of

statistical significance to the neutral level in the average

responses of the members of the sample; consequently, the

first hypothesis is not true. This means that managements of

banks in Lebanon are aware of the concept of social

responsibility.

(2). Analyzing results relative to the second domain:

Potentials of Applying SRA

The following table shows results of the statistical analysis

of items in the second domain, Potentials of Applying Social

Responsibility Accounting, where the mean, standard

deviation, relative weight, level of approval and order of each

item were calculated. Also, the One Sample T-Test was used

to determine the relevance of the responses to the value (3)

which reflects neutrality.

Table 10. Statistical Analysis of Items in the Second Domain.

No Items Std.

Dev

Rel.

Weight T-test Sig

Approval

level Order

1. One of the reasons for not applying social responsibility is

the management’s unawareness of the concept. 4.27 .534 85.4% 27.892 .000 Very high 8

2. The bank periodically organizes training sessions for 4.31 .589 86.2% 26.139 .000 Very high 7

37 Hasan El-Mousawi and Hussein Trabulssi: Potentials of Applying Social Responsibility Accounting in the

Banking Sector in Lebanon: An Empirical Study

No Items Std.

Dev

Rel.

Weight T-test Sig

Approval

level Order

accountants to enhance their abilities and efficiency.

3. The bank encourages accountants to attend scientific and

occupational seminars and workshops. 4.33 .596 86.7% 26.280 .000 Very high 6

4. The accounting system applied in the bank is capable of

measuring social performance. 4.42 .538 88.4% 31.024 .000 Very high 5

5.

The presence of accounting modules to measure social

accounting helps in applying social responsibility

accounting.

4.43 .539 88.6% 31.123 .000 Very high 4

6.

The presence of laws and regulations that impel bank to

disclose their social performance is the only way to

implement social responsibility accounting.

4.45 .541 89.0% 31.451 .000 Very high 1

7. Banks will not be committed to disclosing their social

performance if it is their choice. 4.43 .591 88.7% 28.501 .000 Very high 3

8. The bank discloses its social performance through printed

publications. 4.44 .541 88.8% 31.336 .000 Very high 2

9. The bank discloses its social performance in reports distinct

from the usual financial reports. 4.27 .710 85.4% 20.979 .000 Very high 8

All Items 4.37 .305 87.4% 52.943 .000 Very high

The second hypothesis states: Banks in Lebanon do not

have the potentials to apply social responsibility accounting.

The mean for the sample study responses for all items of the

second domain, Aspects of Applying Social Responsibility

Accounting, is 4.37 out of 5. This is higher than the neutral

value (3); and the value of calculated T test equals to 52.943,

which is higher that tabulated T at the significance level 1%.

This means that there is an addition of statistical significance

to the neutral level in the average responses of the members

of the sample; consequently, the second hypothesis is not

true. This means that managements of banks in Lebanon have

the required potentials to apply social responsibility

accounting.

(3). Analyzing results relative to the third domain: Impact

of SRA on Quality of Financial Reports

The following table shows results of the statistical analysis

of items in the third domain, Impact of Social Responsibility

Accounting on Quality of Financial Reports, where the mean,

standard deviation, relative weight, level of approval and

order of each item were calculated. Also, the One Sample T-

Test was used to determine the relevance of the responses to

the value (3) which reflects neutrality.

Table 11. Statistical Analysis of Items in the Third Domain.

No Items Mean Std.

Dev

Rel.

Weight T-test Sig

Approval

level Order

1.

Presence of additional reports relative to social contribution

to the domain of social development contributes in

measurement and appraisal of the economic unit’s social

performance

4.43 .579 88.7% 29.115 .000 Very high 4

2.

Giving information about social contribution to financial

reports shows the importance of the role that the bank plays

in social and economic development which helps in

measuring social performance.

4.56 .616 91.2% 29.697 .000 Very high 1

3.

Enclosing a report that reflects the extent of the bank’s

commitment to its social responsibility which balances its

interests and the societies’ affects decision-makers.

4.51 .619 90.3% 28.748 .000 Very high 3

4. A bank’s disclosure of social activities affects the investors’

decision to continue dealing with the bank. 4.52 .582 90.4% 30.706 .000 Very high 2

5. A bank’s disclosure of social activities affects depositors’

decision to continue dealing with the bank. 4.39 .572 87.8% 28.559 .000 Very high 6

6.

A bank’s disclosure of social activities affects other

financial institutions’ decision to continue dealing with the

bank.

4.41 .612 88.1% 26.994 .000 Very high 5

All Item 4.47 .379 89.4% 45.55 .000 Very high

The third hypothesis states: Applying social responsibility

accounting does not affect the quality of financial reports.

The mean for the sample study responses for all items of the

third domain, Impact of SRA on Quality of Financial

Reports, is 4.47 out of 5. This is higher than the neutral value

(3); and the value of calculated T-test equals to 45.55, which

is higher that tabulated T at the significance level 1%. This

means that there is an addition of statistical significance to

the neutral level in the average responses of the members of

the sample; consequently, the third hypothesis is not true.

This means that social responsibility accounting affects the

quality of financial reports.

(4). Analyzing results relative to the fourth domain:

Importance of Developing Relation with Local Community

The following table shows results of the statistical analysis

of items in the fourth domain, Importance of Developing

Journal of Finance and Accounting 2019; 7(2): 32-39 38

Relation with Local Community, where the mean, standard

deviation, relative weight, level of approval and order of each

item were calculated. Also, the One Sample T-Test was used

to determine the relevance of the responses to the value (3)

which reflects neutrality.

Table 12. Statistical Analysis of Items in the Fourth Domain.

No Items Mean Std.

Dev

Rel.

Weight T-test Sig

Approval

level Order

1. The bank offers aids and scholarships to members of

society. 1.51 .502 30.1% 34.948 .000 Very low 9

2. The bank contributes in establishing schools and health

centers. 1.49 .607 29.7% 29.312 .000 Very low 11

3. The bank supports universities and colleges in local

communities (providing laboratories, computers, etc). 1.52 .543 30.4% 31.965 .000 Very low 8

4. The bank donates for charitable organizations, cultural

centers and sports clubs. 4.38 .545 87.7% 29.850 .000 Very high 4

5. The bank contributes in projects related to employing

unemployed labor force. 1.51 .570 30.1% 30.771 .000 Very low 9

6. The bank contributes in presenting aids and welfare to poor

families. 1.59 .549 31.9% 30.087 .000 Very low 5

7.

The bank prepares plans and programs which curb poverty

and unemployment in the local community through specific

plans and goals.

1.55 .568 31.0% 29.992 .000 Very low 6

8. The bank contributes in applying housing programs. 4.46 .501 89.3% 34.356 .000 Very high 2

9. The bank contributes in caring for children, elderly and

special needs. 1.47 .501 29.4% 35.853 .000 Very low 13

10. The bank holds projects in less developed and less

advanced areas. 1.47 .501 29.4% 35.853 .000 Very low 13

11. The bank employs people who have special needs. 1.49 .544 29.7% 32.734 .000 Very low 11

12. The bank agrees to train students of universities, colleges or

institutions during and after graduation. 4.61 .505 92.2% 37.459 .000 Very high 1

13.

The bank shares in social and environmental

demonstrations through anti-smoking, anti-drug and

environment preservation campaigns.

1.54 .501 30.7% 34.356 .000 Very low 7

14.

The bank shares in fighting managerial corruption such as

smuggling money, money laundering and illegal

investment.

4.46 .500 89.1% 34.226 .000 Very high 3

All Item 2.36 .172 47.2% 43.657 .000 Low

The fourth hypothesis states: managements of banks in

Lebanon do not develop relations with the local community.

The mean for the sample study responses for all items of the

third domain, Impact of Social Responsibility Accounting on

Quality of Financial Reports, is 2.36 out of 5. This is less

than the neutral value (3); and the value of calculated T test

equals to 43.657, which is higher than tabulated T at the

significance level 1%. This means that there is a lack of

statistical significance to the neutral level in the average

responses of the members of the sample; consequently, the

fourth hypothesis is true. This means that managements of

banks in Lebanon do not develop relations with the local

community.

7. Conclusion and Recommendations

It is evident from the above tables that managements of

banks in Lebanon are aware of the concept of social

responsibility. It is also clear that managements of banks in

Lebanon have the required potentials to apply social

responsibility accounting. In addition, the results showed that

social responsibility accounting affects the quality of

financial reports, which, in turn, affects decisions of

investors, depositors and other financial organizations. The

results also showed that managements of banks in Lebanon

do not develop relations with the local community. However,

banks agree to train students of universities, colleges or

institutions during and after graduation. Also, banks share in

fighting managerial corruption such as smuggling money,

money laundering and illegal investment. In addition, they

contribute in applying housing programs and donate for

charitable organizations, cultural centers and sports clubs.

The results of the research agree with Donaldson &

Preston (1995) in that the organization cannot go without

interacting with local communities. The results were also in

harmony with Phillips, Freeman, and Wicks (2003) in that an

organization has an ethical responsibility to some

stakeholders and to attend to their well-being. The researcher

also agreed with Borglund, De Geer, Frostensen, Lerpold and

Nordbrand, (2012) that an organization should be prepared to

share in its community and be ready to find solutions for

problems which might arise in the community when

necessary.

Based on the above findings, the researchers recommend

that legislators set laws which compel banks to disclose their

social performance, which paves the way to apply social

responsibility accounting. In addition, the existence of

accounting models to measure social performance helps in

39 Hasan El-Mousawi and Hussein Trabulssi: Potentials of Applying Social Responsibility Accounting in the

Banking Sector in Lebanon: An Empirical Study

applying social responsibility accounting. However, having

no awareness of the concept of social responsibility

accounting is one of the main reasons behind not applying it.

Moreover, The Central Bank of Lebanon (Banque Du

Liban) should hold workshops to increase awareness relative

to social responsibility accounting and train employees at the

accounting departments to apply SRA. In addition, the

ministry of finance should also offer incentives to banks

which adopt social responsibility programs.

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