Social Accounting Socio-Economic Essay

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1995a: 62-3, Monbiot 2001). Business increasingly has seen social accounting as a public relations opportunity in an age where increased emphasis has been placed on business image. As global communication in cyberspace has taken off, social accountings have manifested increasingly on the World Wide Web. From the 1980s onwards, business has reflected the increasing concerns about the ecological environment in their social accounting, displacing other social accounting concerns to some extent (Owen et al. 2005, Gray 1999:9). If environmental accountings have in some cases intermeshed with wider social concerns - a tendency that is marked in some forms of sustainability reporting (Elkington 1998) - such social accounting in practice has continued to be disappointing. Environmental and sustainability accountings may have become increasingly evident in practice but critical analysts sum up the way they are seen by using expressions such as public relations' 'greenwash' to summarize their status (Gray and Bebbington 2001).Download full Download Microsoft Word File
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TOPIC: Essay on Social Accounting Socio-Economic Accounting as Assignment

A number of business organizations today take the public relations' possibilities of social including environmental accounting very seriously, spending substantial sums of money on it. Transnational corporations like Shell and BP have joined the Co-operative Bank and the Body Shop as major investors in social accounting. The reports they have produced, often in addition to the legally required annual report, are significant documents, ostensibly communicating the impact of the company's operations on the community and the environment to a range of different stakeholders, evidencing continuities in the latter regard with the stakeholder models pushed in the 1970s. Indeed, the social reports of transnational companies such as Shell and BP are similar in terms of their form to bodies such as Traidcraft (Owen et al. 2005:82). This similarity of form is on the face of it powerful in creating an aura through which the company is able to hold itself out as socially responsible. The reports differ, however, from Traidcraft in terms of their orientation. Commentators on and critics of this type of social reporting by business have pointed out that these reports contain little of value to stakeholders. Indeed, the way companies portray themselves in their social reports amounts to what has again been called a public relations 'whitewash' or 'greenwash'. As in the social accounting manifestations of the late 1960s and early 1970s, the emancipatory potential of social accounting has been displaced whilst social accounting has been mobilized for counter radical and systems preserving purposes. Although there is more social accounting, with the phenomenon of the World Wide Web of note in this regard, close critical analysis indicates that it has come even more evidently to typify the output of the public relations department (Greer and Bruno 2007, Karliner 1997).

In part, out of frustration over the disappointing interventions of the established accountancy professions in respect of social accounting, ISEA was set up ostensibly as a new and global professional accounting body aiming at the global mobilizing of forms of social accounting that would render business organizations socially and ethically accountable (ISEA 2002). Its aim continues to be to function as a body producing social accounting standards and providing education and training programs to develop professionally qualified social accountants. While a global social accounting profession and practice suggests much potential, there are aspects of ISEA that severely restrict the realizing of this. For instance, the founding membership of ISEA includes business organizations along with 'non-profit' corporate responsibility organizations, consultancies, business ethicist groups and business school faculty. Indeed, the constitution of ISEA's governing body indicates a significant input from business (ISEA 2002b, c). It is thus not surprising that the tone of ISEA pronouncements is one of trusting and engaging in experiments or 'trialing' with business organizations (Zadek et al. 1997:56). Relatedly, ISEA's recommendations in respect of social accounting are much nearer to a mainstream approach than they are to a radical. Current social structures and institutions are scarcely challenged and critique of conventional accounting is somewhat sidestepped (Owen et al. 2005:82). Advocacy of a legislative interventionist stance is largely eschewed and substantially countered, ISEA's pronouncements arguably evidencing the influence of a business rhetoric aimed at 'business friendly regulation':

The adoption of AA 1000 [ISEA's foundation standard in social and ethical accounting, auditing and reporting] can play a part in encouraging governments to acknowledge the self-regulating processes that organizations are following to improve accountability and performance. As a reflection of practical and useful best practice, AA 1000 may also help to ensure that any future regulation in the field is viable and meaningful [emphasis in original].

(ISEA 1999:5)

Critics suggest that, in seeking to gain acceptance from business, ISEA's social accounting fuses with the watered down and problematic versions already found as 'voluntary' public relations exercises in practice (Owen et al. 2005). There are many aspects of ISEA's interventions that indicate a displacement and appropriation of the emancipatory and radical possibilities of social accounting. For instance, although ISEA advocates reporting to a whole range of different stakeholders, it gives considerable power to business management to influence the terms of reference for the participation of stakeholders. The danger here is that a narrow instrumentalism will thus shape the engagement with stakeholders. The way in which ISEA elaborates the aims of stakeholder engagement in its foundation framework Accountability 1000 (AA 1000) is of note in this respect. The executive summary of AA 1000 states that stakeholder involvement 'can be at the center of a honorable circle of [financial] performance improvement' (ISEA 1999:20) Owen et al. (2005:82, 85) in their insightful critique of what they call the 'new social audits' - implicating initiatives such as ISEA - comment critically in this respect on the 'managerial slant to the practice of social auditing'. AA 1000's mobilizing of emancipatory concepts parallels the problematic rhetoric of the empowerment literature in management more generally in that it appropriates radical terms and renders them consistent with a conventional and instrumentalist business strategy. The rhetoric here is powerful, downplaying social conflict and displacing concerns about the operations of capitalistic organizations and social conflict.

Another recent development started in 1997 by the Coalition of Environmentally Responsible Economies (CERES) in co-operation with the United Nations' Environmental Programme (UNEP), the GRI associates social, with stress on environmental, bookkeeping. It explicitly refers to being concerned to 'elevate sustainability reporting practices worldwide to a level…[equivalent]…to financial reporting' (GRI 2002). It published Sustainability Reporting Guidelines in 2000 after these, echoing conventional accounting standards setting procedure, had gone through an Exposure Draft stage a year earlier (GRI 2000). The GRI sought that all organizations adopt a 'triple bottom line' approach to accounting whereby duties to economy, society and the environment - considered the three facets of sustainability - would all be reflected. Organizations were encouraged to use the Guidelines as a framework to demonstrate conformance with the UN's Global Compact principles (The Global Compact 2002). The latter principles, proposed in an address by Kofi Annan, the UN Secretary General, to world business leaders at the World Economic Forum, Davos, 31 January 1999, were aimed at involving business in a compact with society and the environment. In his address, the Secretary General suggested to business leaders that they should 'help build the social and environmental pillars required to sustain the new global economy and make globalization work for the entire world's people'. The Global Compact was aimed at disseminating 'good practice based on universal principles' and focusing upon human rights, labor and the environment (The Gobal Compact 2002). The GRI Guidelines, which seek to impact in part through the Chief Executive Officer's Report or its equivalent, promote reporting on employee welfare and also require statements in respect of profile, vision, strategy, policies and organization and management systems (GRI 2000).

Conclusion

The universality of the Guidelines, aside from plans to develop approaches to meet the specific needs of smaller organizations and industry-specific supplements, is explicitly emphasized. On the face of it, GRI is suggestive of a progressive development of enormous potential. In our world today, the idea of a global social accounting is a very positive one. Radical movements are increasingly recognizing a need for democratic and socialistic world governance (Monbiot 2002). A global social accounting goes hand in hand with such a vision. It can potentially play its part in radical and emancipatory projects on a global scale. The possibilities for a global social accounting are also enhanced today given the technological advancements facilitating co-operation and communication on a global level (Gallhofer and Haslam 2007). Membership of GRI's Charter Group, which has provided strategic, financial and operational support to GRI, since its inauguration as a permanent, global and independent institution in April 2002 (GRI 2002), includes representatives from pressure groups such as Amnesty International, Greenpeace, Friends of the Earth, Oxfam and Human Rights Watch, the World Bank group, The Association of Certified Chartered Accountants, accountancy firms such as KPMG and PricewaterhouseCoopers and transnational corporations such as General Motors, Ford, Nike and Shell (GRI 2002). Social accounting academics have long found themselves in this difficult and relatively under-populated area - lying between sophisticated critiques… [END OF PREVIEW] . . . READ MORE

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