Social accounting that is also referred as social auditing and accounting explains social responsibility, corporate social reporting and non-financial reporting implemented within the organizations in order to maintain effective communication process regarding environmental and social impacts of environment (De Grosbois 2016). Considering the same, an increased number of organizations in Australia are implementing social accounting as a process of monitoring, measuring and reporting to all its target stakeholders regarding all the social welfare activities implemented by the companies along with its societal impacts. The objective of the report is to analyze the ways in which implementing corporate social reporting strategies can facilitate Australian companies in marinating suitable reporting and accounting procedures.
Implementation of corporate social responsibility is considered within the accounting and reporting process of the organizations these days to maintain effective corporate social responsibility (Ni and Van Wart 2015). Social accounting that is also considered as social responsibility accounting is attaining increased significance in the corporate accounting and reporting field. This is for the reason that it can facilitate in measuring and informing its general public regarding all its implemented social welfare initiatives along with their impacts on the overall society. For this reason, it has become highly important that the evolution of the CSR conceptual framework can facilitate in better elaboration of social responsibility auditing and accounting (Saeidi et al. 2015). Moreover, it has also been revealed that it is important for the organizations to maintaining social responsibility accounting as it can facilitate in establishing a link between social behavior and company profitability. Justifications of corporate social responsibility based accounting are observed to fulfill all the more obligations, sustaining an effective reputation, maintaining sustainability along with attaining licensing to operating and generating shared value for all its target shareholders (Sierra?García, Zorio?Grima and García?Benau 2015). The businesses are deemed to be highly responsible in generating effective shareholder value along with safeguarding the interests of certain other stakeholders. In order to compete within the global financial market in an effective manner more and more organizations are paying an increased attention on maintaining sustainability through corporate social responsibility accounting all over Australia (Tai and Chuang 2014).
The research question that is to be addressed through completing of the current research is indicated below:
- What is the impact of maintaining corporate social responsibility in reporting and accounting of the Australian organizations?
Findings from Selected Academic Journals
The journal article “Determinants of corporate social responsibility (CSR) disclosure in developed and developing countries: a literature review” revealed that the major objective of social responsibly accounting is to analyze whether companies are addressing their social responsibilities in a better manner or not (Ali, Frynas and Mahmood 2017). The findings gathered from this article indicated that the society based activities of the organizations must be focused on attaining public advantages that includes implementing health projects along with supporting charity projects. The article also revealed that the organizations must consider revealing information in its disclosure in accordance with its stakeholder’s expectations. It is also revealed that the activities of the organizations are perceived to be acceptable that is deemed to be legitimate in order for the organizations to attain its “license to operate”.
The journal article “The influence of governance structure and strategic corporate social responsibility toward sustainability reporting quality” indicated findings regarding “Global Reporting Initiatives (GRI’s)” that has explained certain suitability reporting guidelines along with attempting to make social responsibility of organizations responsible and measurable. The findings gathered from the article also indicated that GRI standards are increasingly employed within the corporate social responsibility reports that creates value for the company along with its consumers (Amran, Lee and Devi 2014). It is also revealed that in order to satisfy the needs of all the stakeholders, corporate social responsibility must be maintained in order to be responsive to the accounting and financial reporting process.
The journal article “Corporate social responsibility and access to finance” revealed that the objective of financial accounting in the corporate social responsibility process within organizations are focused on satisfying external reporting that is regulated by law. Along with the corporate social responsibility reports that are an aspect of voluntary disclosures, the financial reports include management decision support (Cheng, Ioannou and Serafeim 2014). The journal article also presented a view that for dressing needs of its stakeholders, CSR has increased its importance along with being a part of company’s financial reports.
The journal article “Researching corporate social responsibility communication: Themes, opportunities and challenges” indicated certain constructive findings on the fact that the major objective of corporate social accounting is to associate social aspirations along with compliance with governance within the Australian business sector. CSR is also considered to be an aspect of the financial reporting standards along with income tax reporting. The article also explained that in accounting the areas associated with CSR encompass financial and managerial accounting along with income tax reporting (Crane and Glozer 2016). This makes CSR to be an emerging field within the financing and accounting organizations of Australia.
The journal article “The institutionalization of corporate social responsibility reporting” elaborated certain research findings that the three most significant financial reporting standards that considers CSR includes GRI or G3 standards, AA 1000 series along with UN Global compact’s progress communication (de Villiers and Alexander 2014). The findings gathered from the article also revealed that the corporate social accounting promotes suitable code of conduct within the organizations accounting processes through leading organizational groups in sustainable way.
The journal article “Corporate social responsibility: Review and roadmap of theoretical perspectives” revealed that the corporate social accounting within organizations are focused on addressing the auditing principles outcomes related with transparency, assurance and accuracy (Frynas and Yamahaki 2016). It was also found from this article research that most of the Australian organizations are implementing CSR strategies within their financial reporting and accounting processes in order to sustain better auditor quality standard in competing with the organizations those do not abide by corporate social accounting guidelines.
The journal article “Board diversity and corporate social responsibility” explained certain constructive findings regarding corporate social reporting used in the organizations (Harjoto, Laksmana and Lee 2015). It has been revealed from the article that through suitable implementation of CSR initiatives the areas of high auditor quality standards includes the organizations reputation, decreased financial risks, and financial improvement along with ensuring higher earnings for the Australian organizations in compliance with the GRI standards. The article also explained that the corporate social accounting based report covers certain vital areas like organizational goals along with objectives, environmental performance along with certain increased human impact. It was also gathered that GRI promotes sustainability within the financial statements that facilitates in maintaining financial policies in maintaining environmental transparency along with economic social performance.
The journal article “Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis” indicated results of findings regarding the fact that the financial investors along with shareholders have an increased corporate commitment towards the society (Lins, Servaes and Tamayo 2017). The article presented significant findings on the fact that the Australian organizations those consider implementation of corporate social accounting standards within their financial reports attain an increased financial stability. Moreover, it was also gathered from the article that corporate commitment serves as a process of attaining sustainability through focusing on the climate change concerns that can safeguard stakeholders, investors and the community.
Research Question based Findings
The findings from the research are observed to support the research question developed in this essay. The findings from all the eight articles selected have supported the research questions through agreeing to the fact that corporate social reporting initiatives taken by the companies have implications on their reporting and accounting process. It was gathered from the above findings that corporate social accounting facilitates companies in decreasing its direct costs such as material, energy and time loss (Tschopp and Nastanski 2014). Moreover, it can also offer certain other useful implications in increasing employee productivity, decreasing managerial uncertainties and promoting the competitive advantages. Corporate social accounting is introduced in most Australian organizations for it can result in attracting more consumers along with offering an effective business strategy in dealing with administration problems.
The findings of the articles also supported the research question through explaining that there are few important roles of corporate social accounting (Watson 2015). These include reporting social performance along with its impact on consumer’s decisions and for determining the association between recent performance along with business approaches as per the social preferences and measures. Corporate social responsibility accounting also fulfills the responsibility of measuring and determining social performance of the businesses over the financial period through calculating social profits and expenditures related with the business. The social responsibility accounting as stated in the research question has certain vital implications on accounting and reporting processes of Australian companies (Ylönen and Laine 2015). The social responsibility reporting is developed in decreasing the conflicts among the society and businesses resulted from the differences among social and private costs along with advantages for aligning business goals with the societal ones. The research findings attained from the reviewed articles explained that organizations corporate social responsibility based activates must be transparent and measured just like the financial activities are disclosed and measured. Assurance must also be offered on CSR reports by means of robust accounting of related programs, activates and reports (Ni and Van Wart 2015).
Accounting Theories related with Research Question
It has been revealed from analysis of the selected articles in this research that certain relevant accounting theories can be associated with the research question that considers corporate social responsibility has impact on reporting and accounting processes in Australian organizations (Ni and Van Wart 2015). Supporting this research question, there are two common conceptual models such as “Carroll’s Conceptual Model” and “Wood’s Conceptual Model” that explains the implications of social responsibility accounting in a better manner.
“Carroll’s Conceptual Model” is indicated in the figure below that segmented among four types of corporate social accounting responsibilities into legal, economic, moral and philanthropic. Based on this model it has been gathered that economic responsibility of organizations must encompass investment returns for stakeholders and owners, fair payment of the workforce, increased job opportunities along with exploring new resources (Ni and Van Wart 2015). According to the views presented by this accounting theory legal responsibilities of the organization considers abiding by the regulations along with maintaining compliance with laws. Moral responsibility as per this accounting theory deals with the regulation constraints that will focus on safeguarding public and social damages.
“Wood’s Conceptual Model” serves as an effective accounting theory that has developed several types of responsibilities in analyzing dimensions associated with motivational bases of responsibility processes, responsible behavior along with operational outcomes (Saeidi et al. 2015). As per this accounting theory, social responsibility accounting forms a practical dimension that requires directional and motivational aspects for social responsibility. Moreover, this accounting model also elaborated that results o the corporate behavior are deemed to be beneficial for direct analysis of CSR and such outcomes are segmented into social impacts, corporate behavior, plans along with attitudes developed by Australian organizations (Saeidi et al. 2015). This is for the reason that social beneficiaries and dimensions are employed by organizations in administrating responsibility in the accounting and reporting field.
The objective of the report was to analyze the ways in which implementing corporate social reporting strategies can facilitate Australian companies in marinating suitable reporting and accounting procedures. It was gathered from this essay that social accounting that is also considered as social responsibility accounting is attaining increased significance in the corporate accounting and reporting field. This is for the reason that it can facilitate in measuring and informing its general public regarding all its implemented social welfare initiatives along with their impacts on the overall society. It was also revealed from the research findings that it is important for the organizations to maintaining social responsibility accounting as it can facilitate in establishing a link between social behavior and company profitability.
Ali, W., Frynas, J.G. and Mahmood, Z., 2017. Determinants of corporate social responsibility (CSR) disclosure in developed and developing countries: a literature review. Corporate Social Responsibility and Environmental Management, 24(4), pp.273-294.
Amran, A., Lee, S.P. and Devi, S.S., 2014. The influence of governance structure and strategic corporate social responsibility toward sustainability reporting quality. Business Strategy and the Environment, 23(4), pp.217-235.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to finance. Strategic management journal, 35(1), pp.1-23.
Crane, A. and Glozer, S., 2016. Researching corporate social responsibility communication: Themes, opportunities and challenges. Journal of Management Studies, 53(7), pp.1223-1252.
De Grosbois, D., 2016. Corporate social responsibility reporting in the cruise tourism industry: a performance evaluation using a new institutional theory based model. Journal of Sustainable Tourism, 24(2), pp.245-269.
de Villiers, C. and Alexander, D., 2014. The institutionalisation of corporate social responsibility reporting. The British Accounting Review, 46(2), pp.198-212.
Frynas, J.G. and Yamahaki, C., 2016. Corporate social responsibility: Review and roadmap of theoretical perspectives. Business Ethics: A European Review, 25(3), pp.258-285.
Harjoto, M., Laksmana, I. and Lee, R., 2015. Board diversity and corporate social responsibility. Journal of Business Ethics, 132(4), pp.641-660.
Lins, K.V., Servaes, H. and Tamayo, A., 2017. Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. The Journal of Finance, 72(4), pp.1785-1824.
Ni, A. and Van Wart, M., 2015. Corporate Social Responsibility: Doing Well and Doing Good. In Building Business-Government Relations (pp. 175-196). Routledge.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of business research, 68(2), pp.341-350.
Sierra?García, L., Zorio?Grima, A. and García?Benau, M.A., 2015. Stakeholder engagement, corporate social responsibility and integrated reporting: An exploratory study. Corporate Social Responsibility and Environmental Management, 22(5), pp.286-304.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.
Tschopp, D. and Nastanski, M., 2014. The harmonization and convergence of corporate social responsibility reporting standards. Journal of Business Ethics, 125(1), pp.147-162.
Watson, L., 2015. Corporate social responsibility research in accounting. Journal of Accounting Literature, 34, pp.1-16.
Ylönen, M. and Laine, M., 2015. For logistical reasons only? A case study of tax planning and corporate social responsibility reporting. Critical Perspectives on Accounting, 33, pp.5-23.