The Accountants Role in Organizations Sustainability (RegardingSustainability Framework of the International Federation of Accountants (IFAC) 397Commission on Environment and Development (1987)”1. This commission defines the “sustainabledevelopment as follows: (A development which meets the needs of the present without compromisingthe ability of future generation to meet their own needs). The following cases can be referred to fromthis definition: 1. Considering of the impact of the economic decisions on the natural environment, economic development and the social situations in which the people are living and doing the business. 2. Making sure that the productive capacity of these resources is not irrecoverably damaged, and that resources are not depleted faster than their replenishment. In the conference of the “Earth Charter” of the United Nations held in 1992, the subject of thesustainable development was entered in to the main current/ event and the plans of the stability becomecustomary in many parts of the world . The World Business Council of the SustainableDevelopment (WBCSD) describes in such a way: “The sustainable development is a simultaneous activity for the economic prosperity,environmental quality and the social justice”. This definition suggests that the mission of theorganizations and companies is beyond the gaining of the profit and increasing of the wealth of theshareholders. Today, the companies not only must attract the satisfaction of their own shareholders, but alsothey must pay special attention to other stakeholders, including the social groups, institutionssupporting the environment and … etc. Gilbert et al. in 1996 consider the sustainability to mean the“sustaining and increasing of the economic, social and natural resources in order to supply the needs ofthe current and future generation”. This definition expresses that the sustainability differs very much from the development; that is,in addition to the preserve of the resources and the sustainability of the organizations, the developmentof the resources must be paid attention as well in order to use and attract the satisfaction of the futuregeneration (stakeholders). The identification and appearance of the governments and organizations which have led to thesustainability and sustainable development are changing the environment and culture of the commerce.In this case, the global challenge is to make sure of that the sustainable development of theorganizations can: 1- Send back the previous erosion of the natural resources, and 2- improve theeconomic, environmental and social performance. The sustainability has three basic dimensions: 1) Economic Viability 2) Social responsibility, 3)Environmental responsibility. Although the balance, uniformity and homogeneity may be existed among these dimensions,the social responsibility and environmental responsibility generally lead to the increase of the trust inthe organization and thus the creation of the desirable sense for the commerce and doing business.However, the social and environmental responsibility cannot be considered separated from theeconomic viability. The growth and profitability create the wealth and occupation, and the organizations mustcontinue to produce the commodities and services required by the people, and in order to continue aneconomic activity, the organizations must pay attention to the environmental and social aspects as apart of the assuring activity regarding the increase of the value of the organization and the wealth of itsstakeholders. Understanding of the landscape of the sustainability and the sustainable development isthe first step in the capability of how to use this awareness in benefiting the organizations and theirstakeholders. Today, the importance of the concept of the sustainability considering its variousdimensions is in a quantity or degree that many organizations and institutions all over the world payattention to this subject. Also, International Federation of the Accountants (IFAC) has paid a specialattention of this subject in the meetings of its members, and even, has defined the framework for the1 World commission on environment and development
398 Mehdi Moradzadehfard and Mohammad Moshashaeiconcept of the sustainability. The following concepts were formed in the financial and accountingliterature followed by developing the concept of the sustainability. Sustainability Accounting: Consists of the designed methods in order to quantify, record andanalyze the impact of the economic activities on the environment and the social stakeholdercommunity. Sustainability Reporting: Consists of the effort to notify the importance of the impact of thesustainability on the stakeholder through the reporting form making available for the public. Sustainability Assurance: Consists of expressing the opinion by an expert and independentperson regarding the reasonableness of the sustainability report. Sustainability Management: Consists of the organizational activities relating to theidentification of the key impacts and challenges of the sustainability and the effective management ofthem in order to minimize risk exposure. With regard to the subjects which have been expressed, it can be mentioned that the issue of thesustainable development has been referred to implicitly in the Fiftieth article of the constitutional lawof the Islamic Republic of Iran and expressed as follows: “In the Islamic Republic of Iran, theprotection of the environment, which today and the next generations must have a growing social livingin it, is to be construed as a general duty. As a result, the economic activities and so forth which areaccompanied by the pollution of the environment or its irreparable destruction are prohibited.” The continuation of the paper includes the sustainability framework of the InternationalFederation of accountants and the role of the accountants in the sustainability issues then the subjectswill be expressed regarding the sustainability reporting. The conclusion is the terminator of this paper.The Sustainability Framework of the International Federation of AccountantsThe sustainability framework of the International Federation of Accountants combines the wholeaspects of the sustainability aiming at the objectives of the organization, which is the giving of thesustainable value to stakeholders. The framework expresses four aspects in the gathering of all thecritical regions which are taken into consideration for the successful management of a sustainableorganization. Figure 1 Business Internal Strategy Financial Management Investors Other Stakeholders These dimensions are: Business strategy, internal management, financial investors and otherstakeholders. The organizations which have understood and admitted the sustainable development in order togenerate the added value for organization and other stakeholders usually pay attention to above-mentioned dimensions and taken some actions. The various groups of the professional accountants mayhave more interest in, and attention to, the special dimension of the framework. For example, theaccountants who are being active in the managerial high levels may concentrate more on the dimensionof the commerce strategy. Therefore all the accountants must know that the success in the wholeactivities depends on the actions and performances which are to be done in the strategic level. Theprofessional accountants who are employing in the execution of the roles related to the management
The Accountants Role in Organizations Sustainability (RegardingSustainability Framework of the International Federation of Accountants (IFAC) 399(Including planning, budgeting, assessment of the operation and the roles such as the financial analyst)may pay attention to the internal management and the individuals who are responsible for thepreparation of the financial and trading reports or conduct the accounting and assuring services mayconsider that the dimensions of the investors and other stakeholders are to be used more. Thedimensions of the sustainability framework are described briefly:A. Business Strategy Perspective- Taking a Strategic ApproachThe framework puts emphasis on the importance of the adoption of a strategic approach So that, thesustainable development is a part of the strategic discussions, demands and goals of the organizationand has been integrated into the responsibility of the risk. Making sure of that the sustainabledevelopments has appeared prominently in a strategic level is the only way that it can be assured thatthe sustainable development has been integrated and simulated/ adapted with all sections of themanagement cycle, planning, execution and the operational controlling of the organization. Thesustainable development can be construed as a part of the trading operations of the organization onlyby having a strategic business approach.B. Internal ManagementOne of the other dimensions of the sustainability framework of the International Federation of theAccountants is the dimension of the Internal Management which is to be concentrated in order to assistthe organization to achieve the strategy, objectives and the demands of the sustainable development forthe sections which pay attention to the performance and management of the decision-making. As aresult, this view point expresses that how the organizations can reach the success within the reasonabletime span in the improvement of the energy efficiency and reduction of its wasting and, subsequently,improves their own environmental performance while reducing the environmental costs.C. Financial InvestorsUsually, the organizations which have been developed well from the dimension of the internalmanagement are of a good situation in the presentation of the qualified information to the investorsregarding the performance of the sustainability and answerability. The sustainability frameworksuggests that the environmental issues and other sustainability issues combine with the financialstatements in order to support the supervising role of the organization and increase the reporting anddisclosing of the information for the investors.D. Other Stakeholders- More TransparencyThe last dimension of the framework takes into consideration the expansion and extension of a part ofthe sustainable development, which has been formed from the development of the stakeholders, againstthe extensive collection of the expectations in order to improve the transparency and the non-financialreporting. As a result; in the framework mentioned above; taking a strategic approach, internalmanagement, improvement of the energy efficiency and environmental performance and reporting hasbeen regarded; but how to measure and reflect this cases in the report has been forgotten; consequentlyhow to measure sustainability dimension can be a complement to the above framework. The important point is that some issues of the sustainability are not concordant with the four-fold dimensions of the framework, and, on the other hand, these dimensions depend on each other verymuch. For example, the accountants must consider the following cases regarding the dissemination ofthe carbon gas :A) Its strategic importance for the organization, B) The aspect of the measurement andinternal management, C) Out-of-organization reporting of the carbon dissemination, D) Commitmentand interaction with the stakeholders regarding the long-term effects of the carbon.
400 Mehdi Moradzadehfard and Mohammad MoshashaeiThe Professional Accountants and Sustainability of the OrganizationsWith regard to the expressed dimensions of the framework, the accountants must have a usefulcollection of the key components of the individual and relational skills to be able to help theorganization in the usage of the sustainability issues for the organizational objectives. Thesecomponents are as follows: Working in the consultative environment in order to solve the complexities and contradictions,team work, interaction with the different classes of the people intellectually and culturally, negotiationin order to find the acceptable solutions, presentation, discussion, report and defense of the viewpointseffectively and through the formal, informal, written and oral connections. The role of the professional accountants in the sustainability of the companies goes, by far,beyond the processes of the collection, record, analysis and the reporting of the information related tothe sustainability and has been developed. Many professional accountants occupy variousorganizational positions, including the high-level/status managers who have thus direct and mucheffect on the organizational strategy and decision-making and can assist the organizations directly or asthe supporter in the employment of the sustainability issues in the strategic planning and the executionof these plans. In overcoming the cultural, organizational and economical obstacles, the accountantscan assist the sustainability of the organization. For example, often, the decisions are made for theshort-term period and on the basis of the incomplete information and the disregard of the extraorganizational and intangible benefits and costs, while the accountants stimulate the decision-makers tothe foresightedness and prudence and provide with them the complete and useful information.Dynamics of the sustainability of the companies depends on the production, analysis, reporting and theassurance regarding the accurateness and reliability of the financial and non-financial information.Therefore, for the professional accountants, attainment of the understanding of the concept of thesustainability and the challenges in which there exist is important in order to achieve the long-termgrowth in the value of the stakeholders and the other stakeholders. Today, organizations pay a specialattention to the accountants in their decision makings and determining the strategy of the organization,and the high-level/ supreme executive and consultative positions are often suggested to them. Theattention of the organizations, managers to the accountants in the vital problems is because of the highunderstanding and the strength of the accountants, analysis regarding the financial issues andsustainability. At present, with regard to all activities, performed by the accountants in the previousyears, are conducted by the accounting information systems, not only the need to the accountants hasnot been reduced, but also the managers of the organizations feel more reliance upon accountants.Considering the subjects expressed in this section, we realized the significance of the accountants rolein the sustainability of the organizations. But, the special role played by the accountants in thesustainability issues is, by far, different in the various organizations and the internal conditions of eachorganization. These roles are briefly as follow: • Development of the policies of organization against the sustainability issues, their application and monitoring throughout the organization and also in managing the operating risk. • Interference in the designation, launching and the monitoring of the purchasing policies, standards and the managerial systems related to the supply chain. • Supporting of the process of the interaction with the stakeholders using reliable and available data and also assistance to analyze the stakeholders feedback. • Identification of the voluntary environmental or social regulations and rules which are appropriate and related to the business of the organization and integration of these regulations or rules using the available managerial informational system in the organization. • Supporting benchmarking through relevant and reliable information in accessible, meaningful and comparable ways. • Protection and expansion of the awareness regarding the regulations, taxing laws and exercisable subsides for the activity which the organization is engaging to do it in order to present the on time information regarding the social and environmental issues.
The Accountants Role in Organizations Sustainability (RegardingSustainability Framework of the International Federation of Accountants (IFAC) 401 • Support of the process of data preparation and the reporting mechanism for the interpretation and decision-making. As expressed earlier, the role of the accountants in the issues of the sustainability is beyond theordinary operations, including the collection, registration and analysis of the information relating tosustainability, but since the result of the performance of the company regarding the sustainabilitybecomes certain for the users through reporting the related information and also, the Global ReportingInstitute (GRI)2 has put emphasis on the sustainability reporting and even, raised the guides andadvices regarding the principles of the reporting, it is of the special importance for the organization.Sustainability reporting is in fact a kind of reporting the triple model (Triple Bottom Line-TBL) andmust be prepared and presented in a form which is to be efficient and usable for the users. For thispurpose, the Global Reporting Institute/ organization (GRI-2002) has determined the related principlesof the sustainability reporting which have as follows: Transparency, Relevance, Reliability,Comparability, understandability, timely, integrity, sustainability content. Confirming and emphasizing the suggestions presented by the Global Reporting Institute,International Federation of the Accountants (IFAC) believes that the sustainability reporting must havetransparency and reliability in order to be useful, fruitful and efficient. The reliability of thesustainability reporting depends on both the content and the manner of presenting the report (IFAC;2007). In fact, the sustainability reporting is the propagation and expansion of the investment oforganization in the development of a systematic approach for the integrated management of thesustainability performance. As a result, the number of the organizations which have presented thesustainability reporting in the recent years has had the rising trend. However; to improve sustainability and sustainable development attention should be paid to allfour concepts of Sustainability Accounting, Sustainability Reporting, Sustainability Assurance andSustainability Management. But it seems that the concept of Sustainability Reporting has beenconsidered more than sustainability accounting and other concepts. the sustainability accountingdiscusses measurement, analysis and records basic dimension of sustainability. In other word, reportingis done after measurement; therefore until we cannot find an appropriate standard to measuresustainability dimensions, we will not be able to have a desirable reporting.ConclusionToday, sustainability of organizations is one of the concepts which has attracted much attention.Therefore, organizations in order to conduct the social duty and also remain in the scene of the tradingcompetition must include the sustainability a part of the policies of the organization and take itseriously. Because remaining in the trading competitive space requires the attraction of the customerssatisfaction and the customers are, in fact, those which the aspects of the sustainability of theorganization relate to them and are important for them. In this direction, whereas the accountants playan undeniable role in this context, they require to develop their knowledge and skill not only in theaccounting and financial fields, but also in the aspects of the sustainability and decision making.Otherwise, if they rely on the accounting knowledge, they will go out from the working life cycle likethe organizations which are indifferent towards the sustainability. With regard to the discussions which were raised, the lack of time does not allow to includesuch important cases, which are todays discussion of the world of the business in the universityacademic chart as the institution of the academic instruction of the accounting occupation, so that the2 The Global Reporting Institute (GRI) has started working since 1997, and it presented the guidance and advices in the domains of the business, accounting, investment, environment, human right and organizational job in 2002, as an independent and non-governmental institution. (MoradzadehFard- 2006).
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