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:
“Certain books seem to have been written not for the purpose that we learn something from them but that we know that the author was a knowledgeable person.”
—Johann Wolfgang Von Goethe (1749–1832)
“I don’t like to be idle; in fact, I often feel somewhat guilty unless there is some purpose to what I am doing. But spending a few hours—or a few days—in the woods, swamps or alongside a stream has never seemed to me a waste of time.... I derive special benefit from a period of solitude.”
—Jimmy Carter (James Earl Carter, Jr.)
“When one pays a visit it is for the purpose of wasting other people’s time, not one’s own.”
—Oscar Wilde (1854–1900)