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:
“Our purpose in founding the city was not to make any one class in it surpassingly happy, but to make the city as a whole as happy as possible.”
—Socrates (469–399 B.C.)
“... my one aim and concentrated purpose shall be and is to show that women can learn, can reason, can compete with men in the grand fields of literature and science ... that a woman can be a woman and a true one without having all her time engrossed by dress and society.”
—M. Carey Thomas (1857–1935)
“During the cattle drives, Texas cowboy music came into national significance. Its practical purpose is well known—it was used primarily to keep the herds quiet at night, for often a ballad sung loudly and continuously enough might prevent a stampede. However, the cowboy also sang because he liked to sing.... In this music of the range and trail is “the grayness of the prairies, the mournful minor note of a Texas norther, and a rhythm that fits the gait of the cowboy’s pony.””
—Administration in the State of Texa, U.S. public relief program (1935-1943)