Abstract
This chapter explores the potential and limitations of Social Accounting, a much relevant discussion in the context of a book about Ethics in Finance. This chapter intends to introduce some of the ongoing discussions around Social Accounting to scholars from other disciplines. There is no intention of presenting an exhaustive picture of Social Accounting, and the choice of literature has been narrowed to those issues more relevant for Ethics in Finance.
The chapter presents a short introduction to Social Accounting and its recent history. Then, there is an exploration of five issues that may interest a general academic audience: first, the reasons and purpose of corporate disclosure of social and environmental information, being that this kind of disclosure is usually not mandatory; second, the current discussion about regulation in this field, whether regulation of Social Accounting contributes to Sustainability or not; third, an introduction to the use of Social Accounting for internal purposes, that is, information not disclosed to external parties but used instead by management for decision-making; fourth, the link between Social Accounting and financial performance; and finally, the promise of Social Accounting to contribute to Sustainability.
Some of the main ideas are as follows. There is a tension between companies, which possibly do not share all social and environmental information, and stakeholders, who would expect higher transparency. Thus, we should not assume that companies naively disclose social and environmental information. Then, regulation for social reports could help to increase the quality of reports, but some studies show that regulation by itself will not automatically improve disclosure. Additionally, studies in managerial accounting emphasize the complexity of working with social and environmental indicators. Thus, it is possible that managers struggle to collect and make sense of information about all the social and environmental impacts of their firm. Furthermore, the link between sustainability and financial performance remains elusive. Finally, we should be aware of what Social Accounting can deliver (and what it cannot do) in terms of organizational change. Consequently, practitioners should not refrain from using complementary tools from other disciplines. Overall, Social Accounting can contribute in a consistent way to the improvement of corporate sustainability. In that sense, Social Accounting is an increasingly important tool for both managers and stakeholders.
Similar content being viewed by others
References
Accounting Standards Steering Committee (1975) The corporate report. Accounting Standards Steering Committee, London
Acosta E, Agostini M (2016) Mandatory disclosure about environmental and employee matters in the reports of Italian-listed corporate groups. Soc Environ Account J 36(1):10–33
Arjaliès D, Mundy J (2013) The use of management control systems to manage CSR strategy: a levers of control perspective. Manag Account Res 24(4):284–300
Bebbington J, Gray R, Owen D (1999) Seeing the wood for the trees. Account Audit Account J 12(1):47–51
Boiral O, Henri J (2017) Is sustainability performance comparable? A study of GRI reports of mining organizations. Bus Soc 56(2):283–317
Burke J, Clark C (2016) The business case for integrated reporting: insights from leading practitioners, regulators, and academics. Account Matters 59(3):273–283
Burritt R, Schaltegger S (2010) Sustainability accounting and reporting: fad or trend? Account Audit Account J 23(7):829–846
Cho C, Patten D (2007) The role of environmental disclosures as tools of legitimacy: a research note. Acc Organ Soc 32(7):639–647
Cho C, Roberts R, Patten D (2010) The language of US corporate environmental disclosure. Acc Organ Soc 35(4):431–443
Dahlsrud A (2006) How corporate social responsibility is defined: an analysis of 37 definitions. Corp Soc Responsib Environ Manag 15(1):1–13
Deegan C (2002) Introduction. The legitimising effect of social and environmental disclosures – a theoretical foundation. Account Audit Account J 15(3):282–311
Durden C (2008) Towards a socially responsible management control system. Account Audit Account J 21(5):671–694
Estes R (1972) Socio-economic accounting and external diseconomies. Account Rev 47(2):284–290
Gond J, Grubnic S, Herzig C et al (2012) Configuring management control systems: theorizing the integration of strategy and sustainability. Manag Account Res 23(3):205–223
Gray R, Kouhy R, Lavers S (1996) Corporate social and environmental reporting. A review of the literature and a longitudinal study of UK disclosure. Account Audit Account J 8(2):47–77
Gray R, Dey C, Owen D et al (1997) Struggling with the praxis of social accounting. Stakeholders, accountability, audits and procedures. Account Audit Account J 10(3):325–364
Kaplan R, Norton D (1992) Balanced scorecard. Measures that drive performance. Harv Bus Rev 70(1):71–79
KPMG (2017) The KPMG survey of corporate responsibility reporting. Klynveld Peat Mrwick Goerdeler, Amstelveen
Larrinaga-González C, Bebbington J (2001) Accounting change or institutional appropriation? – a case study of the implementation of environmental accounting. Crit Perspect Account 12(3):269–292
Larrinaga-González C, Carrasco-Fenech F, Caro-González F et al (2001) The role of environmental accounting in organizational change. An exploration of Spanish companies. Account Audit Account J 14(2):213–239
Leong S, Hazelton J (2019) Under what conditions is mandatory disclosure most likely to cause organizational change? Account Audit Account J 32(3):811–835
Ludeke-Freund F, Massa L, Bocken N et al (2015) Business models for shared value. Network for Business Sustainability, Cape Town
Luque-Vílchez M, Larrinaga C (2016) Reporting models do not translate well: failing to regulate CSR reporting in Spain. Soc Environ Account J 36(1):56–75
Margolis J, Walsh J (2003) Misery loves companies: rethinking social initiatives by business. Adm Sci Q 48(2):286–305
Medawar C (1976) The social audit: a political view. Acc Organ Soc 1(4):389–394
Mitchell M, Curtis A, Davidson P (2012) Can triple bottom line reporting become a cycle for “double loop” learning and radical change? Account Audit Account J 25(6):1048–1068
Mobley S (1970) The challenges of socio-economic accounting. Account Rev 45(4):762–768
Pérez A, García de los Salmones M, López C (2015) Corporate reputation in the Spanish context: an iteration between reporting to stakeholders and industry. J Bus Ethics 129(3):733–746
Perkiss S, Dean B, Gibbons B (2019) Crowdsourcing corporate transparency through social accounting: conceptualizing the “spotlight account”. Soc Environ Account J 39(2):81–99
Porter M, van der Linde C (1995) Green and competitive: ending the stalemate. Harv Bus Rev 73(5):120–134
Ramanathan K (1976) Toward a theory of corporate social accounting. Account Rev 51(3):516–528
Retolaza J, San-José L, Ruíz-Roqueñi M (2016) Social accounting for sustainability: monetizing the social value. Springer, Cham
Rodrigue M, Magnan M, Cho C (2013) Is environmental governance substantive or symbolic? An empirical investigation. J Bus Ethics 114:107–129
San-José L, Retolaza JL (2018) Ethics in finance research: recommendations from an academic experts Delphi panel. J Acad Ethics 16:19–38. https://doi.org/10.1007/s10805-017-9293-y
Shabana K, Buchholtz A, Carroll A (2016) The institutionalization of corporate social responsibility reporting. Bus Soc 56(8):1107–1135
Simons R (1995) Levers of control: how managers use innovative control systems to drive strategic renewal. Harvard Business School Press, Boston
Unerman J, O’Dwyer B (2007) The business case for regulation of corporate social responsibility and accountability. Account Forum 31(4):332–353
Zicari A, Perera-Aldama L (2017) Value-added statements as a communication tool for stakeholders: the case of Industrias Peñoles in Mexico. In: Freeman E, Kujala J, Sachs S (eds) Stakeholder engagement: clinical research cases. Springer, Cham, pp 193–214
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Section Editor information
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this entry
Cite this entry
Zicari, A. (2020). The Many Merits and Some Limits of Social Accounting. In: San-Jose, L., Retolaza, J.L., van Liedekerke, L. (eds) Handbook on Ethics in Finance. International Handbooks in Business Ethics. Springer, Cham. https://doi.org/10.1007/978-3-030-00001-1_14-1
Download citation
DOI: https://doi.org/10.1007/978-3-030-00001-1_14-1
Received:
Accepted:
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-00001-1
Online ISBN: 978-3-030-00001-1
eBook Packages: Springer Reference Religion and PhilosophyReference Module Humanities and Social SciencesReference Module Humanities