social accounting

1. SOCIAL
ACCOUNTING

2. INTRODUCTION
 Social accounting is a kind of movement by
which everyone can analyze like a business
accountant.
 Expresses its level of social goals to the
society

3. Meaning
 Process of communicating the social effects of
organisations economic actions to the society
Definition
“Social Accounting is the application of
double entry book keeping to social economic
analysis.” — Kohler

4. Objectives
To identify and measure the contribution of a firm
towards the society.
 To determine if the firm’s strategies are
consistent with social priorities.
 To make available, relevant information about
the firm's goals, programmes, performances, use
of scare resources.
To Quantify and properly present the social costs
and benefits of an enterprise.

5. Scope of Social Accounting
 Net income contribution
 Human resource contribution
 Public contribution
 Environmental contribution
 Product or service contribution

6. Features
 Expression of a company’s social
responsibilities.
 Related to the use of social resources.
 Emphasize on relationship between firm and
society.
 Determines desirability of the firm in society.
 Application of accounting on social sciences.
 Emphasizes on social costs as well as social
benefits.
 Easy to understand the activities of the firm.

7. Benefits
• It counters the adverse publicity or criticism leveled
• It assists management in formulating policies and
programmes.
• The firm proves that it is not socially unethical
• It acts as an evidence of social commitment.
• It improves employee motivation.
• Necessary from the view point of public interest groups,
social organisations investors and government.
• It improves the image of the firm.
• The management gets feedback on its policies aimed at
the welfare of the society.
• It helps in marketing through greater customer support.
• It improves the confidence of shareholders of the firm.

8. Social Accounting Approaches
♫ Classical Approach: Milton Friedman. The social
responsibility of business is to use its resources and engage
in activities designed to increase its profits.
♫ Descriptive Approach: Social activities of a business are
presented along with financial statements in a narrative
form.
♫ Integral Welfare Theoretical Approach: It advocates the
preparation of a social report comprising social benefits and
social costs.
♫ Social Indicator (Brummet Approach): Different areas of
social contribution to be undertaken. Total performance =
Net income + Human resource combination + public
contribution + Environmental contribution +
Product/Service contribution.
♫ Linowes operating statement approach:
Social contribution = Social benefits – Social costs.

9. CONCLUSION
 A systematic assessment and reporting on
those parts of a company’s activities, which
have a social impact.
 Reporting the information of the social
activities of the concern to its users (both
internal and external)