Purpose
Social accounting challenges conventional accounting, in particular financial accounting, for giving a narrow image of the interaction between society and organizations, and thus artificially constraining the subject of accounting.
Social accounting, a largely normative concept, seeks to broaden the scope of accounting in the sense that it should:
- concern itself with more than only economic events;
- not be exclusively expressed in financial terms;
- be accountable to a broader group of stakeholders;
- broaden its purpose beyond reporting financial success.
It points to the fact that companies influence their external environment ( some times positively and many a times negatively) through their actions and should therefore account for these effects as part of their standard accounting practices. Social accounting is in this sense closely related to the economic concept of externality.
Social accounting offers an alternative account of significant economic entities. It has the "potential to expose the tension between pursuing economic profit and the pursuit of social and environmental objectives".
The purpose of social accounting can be approached from two different angles, namely for management control purposes or accountability purposes.
Read more about this topic: Social Accounting
Famous quotes containing the word purpose:
“War is an ugly thing, but not the ugliest of things: the decayed and degraded state of moral and patriotic feeling which thinks nothing worth a war, is worse.... A war to protect other human beings against tyrannical injustice; a war to give victory to their own ideas of right and good, and which is their own war, carried on for an honest purpose by their own free choice—is often the means of their regeneration.”
—John Stuart Mill (1806–1873)
“I envy neither the heart nor the head of any legislator who has been born to an inheritance of privileges, who has behind him ages of education, dominion, civilization, and Christianity, if he stands opposed to the passage of a national education bill, whose purpose is to secure education to the children of those who were born under the shadow of institutions which made it a crime to read.”
—Frances Ellen Watkins Harper (1825–1911)
“Patience and tenacity of purpose are worth more than twice their weight of cleverness.”
—Thomas Henry Huxley (1825–1895)