This document discusses socially responsible accounting. It presents socially responsible accounting as integrating non-financial measures into financial reporting to communicate the social and environmental effects of organizations. It aims to help companies address stakeholder accountability and improve social, environmental, and economic performance. There is no standardized model. Approaches to social accounting measurement are discussed, including the classical, descriptive, integral welfare, program management, pictorial, and footnote disclosure approaches. The objectives of social accounting are identified as identifying a firm's net social contribution, determining consistency with social priorities, developing models for social cost/benefit quantification and presentation, and meeting information needs.

1. SOCIALLY
RESPONSIBLE
ACCOUNTING
PRESENTED BY:
PUGAZH. A
XAVIER INSTITUTE OF BUSINESS ADMINISTRATION

2. INTRODUCTION
It is the concept of integrating nonfinancial
measures into financial reporting.
The process of communicating the social and
environmental effects of organizations.
It is a process that helps a company to address
issues of accountability to stakeholders.
To improve performance of all aspects i.e.social,
environmental and economic.
Has no standardized model.

3. National Association of Accountants Committee of USA in 1974 has
identified following four areas of social accounting:
(a) Community Development.
(b) Human Resource.
(c) Physical resources and Environmental contribution.
(d) Product or Service Contribution.

4. PORTFOLIO
GROWTH
Scope of Social Responsibility Accounting
(a) Net Income Contribution.
(b) Human Resource Contribution.
(c) Public Contribution.
(d) Environmental Contribution.
(e) Product or Service Contribution.

5. NET INCOME CONTRIBUTION
•Growing emphasis on social objectives does not reduce importance of profit motive.
•Brummet was of the view; no firm can survive long without earning profits.
• A firm continuously running into losses for longer periods may become sick and become a
burden on society. On the other hand any firm cannot think about accomplishment of
other social goals without having adequate surplus funds, rather inadequacy of funds create
hurdles in achieving other social goals.

6. HUMAN RESOURCE CONTRIBUTION
This contribution reflects impact of enterprises policies on human resources. General
awareness among employees and working class has increased importance of human
resources.
Increased emphasis on human resources has led to the recognition of Human
resources as human assets and the need of accounting for human resources.
Union management relations, recruitment of minorities, employment to handicapped,
employee welfare programmes, off the Job training, on the job training, promotion policies
Job security, Job satisfaction, merit rating, industrial relations, employee development
programmes are the activities which are included in human resource contribution.

7. PUBLIC CONTRIBUTION
•This contribution reflects enterprise’s policies’ impact on individuals which are outsiders
for the organisation.
•These activities include social clubs, schools, charitable organisation, health centres,
libraries, maintenance of chowks, lawns, employment opportunities for minorities and
handicapped.
•Creation of Jobs and employment opportunities are also contribution of an enterprise.

8. ENVIRONMENTAL CONTRIBUTION
•This contribution includes activities directed towards reducing deterioration of water,
air and soil.
•Installation of air purifiers, disposal of wastes, reduction in noise pollution are also
included in this contribution.

9. PRODUCT OR SERVICE CONTRIBUTION
•This area includes product safety, Product quality, packaging, product promotion,
advertisements, service facilities, product durability, customer satisfaction, completeness
and clarity of labelling.

10. SOCIAL ACCOUNTING APPROACHES
•Several accountants, economists and social scientists have formulated different formats
for the purpose of measuring and reporting social information.
• However, there is no single approach which has been generally accepted.

11. CLASSICAL APPROACH
•The classical approach asserts that by maximizing the profits within the constraints of the
existing legal and ethical framework, business corporations are acting in the best interests of
the society at large.
• Milton Friedman (1961) advocated, “there is one and only one social responsibility of
business-to use its resources and engage in activities designed to increase its profits, as long
as it stays within the rules of the game, which is to say, engage in open and free
competition, without deception or fraud.”
• However, in the changing environment and social parameters this approach is no more
acceptable.

12. DESCRIPTIVE APPROACH
•This is the simplest and traditional method of reporting social information.
•According to this method the social activities of business corporations are
presented along-with financial statements in narrative form.
•Usually, only positive social aspects of a firm are presented in a non-quantitative
form.
•Thus, the impact of social activities is not measured under this method.

13. INTEGRAL WELFARE THEORETICAL APPROACH
•This approach advocates the preparation of a social
report comprising social benefits and social costs.

14. PROGRAMME MANAGEMENT APPROACH
•According to this approach whenever any enterprise has some social
objective to achieve, it has some definite social programme, and plan to
achieve the objectives and how the feedback and control has been exercised,
should be disclosed.

15. PICTORIAL APPROACH
•Under this approach, photographs of health care center, schools and hospitals run by
the company are presented) in annual reports.

16. 6. FOOT NOTE DISCLOSURES
•It consists of quantitative measurement on the social involvement of the
firms.
•This is to be included as an additional footnote in the financial statement
section of the annual report.

17. The prominent objectives of social accounting are as follows:
•(1) To identify and measure the net contribution of an individual firm towards the society.
•(2) To determine whether an individual firm’s strategies and practices are consistent with
widely shared social priorities.
•(3) To make available relevant information about firm’s goals, policies, programmes and
performance towards use and contribution to scarce resources and social resource allocation.
•(4) To develop models of quantification and proper presentation of social costs and benefits
of an enterprise.
•(5) To meet information needs of consumers and society.

18. CONCLUSION
The social responsibility is very importance to both society and business
organizations. Although there are some arguments for and against social responsibility,
even more of the organizations would take action on social responsibility. Many of the
advantages being social responsibility was created, some of that was already discuss on
previous pages. Believed that, the best interest of business organizations is social
responsibilities, that would be benefit in the long run of company, can be earn more
profit, and benefit to the human and the environment.