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:
“Civilization is a process in the service of Eros, whose purpose is to combine single human individuals, and after that families, then races, peoples and nations, into one great unity, the unity of mankind. Why this has to happen, we do not know; the work of Eros is precisely this.”
—Sigmund Freud (1856–1939)
“We need not only a purpose in life to give meaning to our existence but also something to give meaning to our suffering. We need as much something to suffer for as something to live for.”
—Eric Hoffer (1902–1983)
“Thus one can observe that those who proclaim piety as their goal and purpose usually turn into hypocrites.”
—Johann Wolfgang Von Goethe (1749–1832)