Define “Social accounting” and describe why the need for social accounting has arisen.

Environmental accounting

Executive Summary

Social accounting is a new concept in the business world that has shown great promises to the long-term financial gain for the company as well as long-term social gains. As a company is a part of the society, it is obligated to pay something in return for what it gets from the society. Every company serves its target customers who are also a part of the society. In order to make customers satisfy, a company must serve the society where customers dwell.

I have been recently appointed at Morrison and Co. as an intern. The senior director of the company has asked me to conduct research on social and ethical accounting in Malaysia. I have chosen Canon Marketing (Malaysia) Sdn Bhd for the purpose of conducting my research.

In the first part of this report I have briefly described about what it does mean by social accounting, followed by the reason behind the rise of social accounting. In the next part, I have discussed the rationale for undertaking social accounting. I have also discussed its advantages and its disadvantages. Next, I have explained 8 issues that are considered to be the key principles of accounting in the context of social accounting. In the last part of the report, I have discussed about environment, workplace, community and marketplace. I have explained these things in the context of a company named Canon Marketing (Malaysia) Sdn Bhd. It is an enlisted company in Bushra Malaysia. I have taken help of several books and the internet to complete this report. I report will help to understand SEA in the context of Malaysia.

Contents

Executive Summary

Task - A Define what is meant by the term “Social accounting” and describe why the need for social accounting has arisen

Social accounting

Need for the rise of social accounting

Task – C SEA is rather a new concept but there is some consensus emerging about standards of quality. Discuss the EIGHT issues which have been proposed by three leading scholars in social accounting as the key principles of accounting.

Inclusivity

Comprehensiveness

Materiality

Orderliness and timeliness

Value assurance

Accessibility

Comparability

Reliability

Relevance

Task - D Select a misted company on Bushra Malaysia and summarize the initiatives/ accomplishment of the company in the categories of “Environment” “Workplace” “Community” “Marketplace”

Society

Environment

Marketplace

Workplace

References

Task - A Define what is meant by the term “Social accounting” and describe why the need for social accounting has arisen

Social accounting

Mook (2013) refers that Social accounting refers to a procedure by which an organization can create a link between social, environmental outcomes and economic initiatives of the organization. This method interacts with a specific interest group in the society and let them know about those outcomes while carefully observing their reactions to those outcomes. For example, Canon Opto (Malaysia) Sdn Bhd tries to communicate the social impacts of its product to the higher income and middle- income group in Malaysia.

Need for the rise of social accounting

Zadek et al. (1997) said that Social accounting emerged as a response contrary to traditional accounting. While traditional accounting focuses on the financial success of a firm, social accounting focuses on a broader viewpoint that is not necessarily be measured in financial terms. This concept doesn’t concentrate on the individual gain. Instead, it is concerned with social gains that might have bigger influence on our life. There are a number of accountability aspects that have added great importance to this method and thus it became popular overnight.

In early 1970s, there are some local establishments that made customized reports on the effects of shutting down plants on the local groups in United Kingdom. In 1980s environmental pollution became a great concern and industries were mainly responsible for that. This also accelerated the rise of social accounting

Task – C SEA is rather a new concept but there is some consensus emerging about standards of quality. Discuss the EIGHT issues which have been proposed by three leading scholars in social accounting as the key principles of accounting.

In this part I have described 8 issues as key principles of quality which have been proposed by Gowthorpe, C. and Blake, J. (1998) and Jeffrey C. (2008). Those issues are explained below:

Inclusivity

Gowthorpe and Blake (1998) said that Inclusivity focuses on all the phases of SEA. There are two types group related to SEA. One group who has an influence in the process, the other group is influenced in the process. Principles of quality need the opinion of both the groups. No one is ignored in this process.

Comprehensiveness

Another principle of quality is the presence of all the actions related to SEA. Exclusion will result in bias output which will hamper reliability. SEA requires that all the relevant activity to be included and irrelevant things to be excluded. If anything is excluded, a logical explanation should justify the exclusion. A wise accountant should be careful about the misrepresentation of activity and should be cautious of irrelevant consequences.

Materiality

Relevant information is the information that is supposed to impact stakeholder(s) directly or indirectly. This type of must be taken into consideration in SEA. Their consequences also need to be presented without bias. There is another thing that needs to be included. It must include the involvement of stakeholders, for example the investigation of their wants and demands, in order to evaluate if information is important.

Orderliness and timeliness

This issue includes the necessity of order, methodical and timely initiatives of SEA. The report of SEA must be presented to the proper authority in a timely manner so that the report can contribute in the decision making process. This is a continuous process. It doesn’t follow the annual pattern of reporting like traditional accounting.

Value assurance

According to this principle of quality, a company’s activity must be audited by a self-regulated, skilled one or more 3rd party. SEA focuses on the integrity throughout the process including all the parties involved. It also needs to confirm that the results are precise and correct and the process is done aboding all the rules and regulations imposed by both the organization and the government.

Accessibility

This principle focuses on the continuous flow of information about the SEA processes and reporting to the stakeholders of the company who are involved. A company tells about it financial and ethical conditions by providing these report. This principle implies that, stakeholders can easily get these reports without facing any obstacle.

Comparability

SEA makes sure that reports are made in a way that can help stakeholders to comparison mat be help between the outcomes of the organization and past years’ performance or any establish criteria. Comparison may also be held between the organization and any rival organization.

Reliability

This principle of quality focuses on the “unbiased” reports prepared by following SEA rules and assumptions for the stakeholder of a company to aid decision making process. To ensure reliability, information used in the process must be examined for its validation and timeliness. Reports must also exclude information that is not related to ensure reliability.

Relevance

Jeffrey (2008) refers that the information that is presented to aid decision making process must be convenient to understand and beneficial to the company and its stakeholders. Stakeholders must be involved in the process. Involving them in necessary to ensure relevance of the information presented.

Task - D Select a misted company on Bushra Malaysia and summarize the initiatives/ accomplishment of the company in the categories of “Environment” “Workplace” “Community” “Marketplace”

Canon Marketing (Malaysia) Sdn Bhd (Canon) is an elsited company in Bushra Malaysia. It is a multinational company. Its core product is camera. Besides it also sells other electronic gadget to its target customers. The company has a reputation for contributing to the society and environment. The company is also renowned for its excellent workplace environment. The company is considered to be a leader in the marketplace. Its accomplishment in the society, environment, marketplace and workplace is briefly discussed below

Society

Canon (2015) refers that in the year of 2014, the company arranged a corporate social responsibility project that aims to aid children from the less privileged part of the society. The project was led by the planning division of the company. 102 children from various unprivileged areas were chosen for the project. The age-range of those children were three to twenty four years old. The project also hired 12 professional custodians from Calvary Homes, Puspanesam Home, and Berkat children Homes for taking care of those children who are taking part in the project. The goal of this project was to improve understanding ability and imagination power of those children and taking excellent photos as well.

Environment

Canon (2015) refers that the company started a scheme In the middle of 2014. The name of this scheme was “Greening the Earth”. The project was a big success. There were about 300 contestants competing to win. The aim of this project was to make the local people realize about prospecting the environment of the Earth. The company tries to make the locals accustomed to some good habits that are beneficial to the environment, such as planting trees. The project was also planned to make people realize about the beauty of trees can be a great source of joy. The project resulted in planting 330 trees in just one day.

Marketplace

Canon (2015) refers that a company who performs great in the marketplace abiding the standards defined the ISO is awarded ISO 14001. This award is given to promote environment protection measure while showing excellence in the marketplace. Canon Marketing (Malaysia) Sdn Bhd was recognized for the excellence in the marketplace and promoting green environment this award in the year 2007.

ISO 9001 is awarded for the successful execution of quality management system. This is a tough task because quality management requires enhancing the ability of a company’s people and process incessantly. Because of Canon Marketing (Malaysia) Sdn Bhd’s undaunted dedication to the process of quality management, the company was awarded with this certificate.

Workplace

Canon (2015) refers that the company has a very good workplace environment. The company has recently launched a program that will enhance the potential of its employees. It is called “EHS” program. It means endowment health and safety program. The company considers implementing health and safety measures is its top priority in the workplace. The company also has adopted some measures in case anything goes wrong. It also promotes interactions among its employees. It arranges parties on different occasion so that employees can understand each other well. The company also promotes group work. The company also has a policy to encourage them through awarding them and recognizing their contribution to the company.

References

1. Gowthorpe, C. and Blake, J. (1998), “inclusion; Ethical issues in accounting”, 2nd edition, London: Routledge.
2. Mook, L. (2013), “Social accounting; Accounting for social value”, 4th edition,Toronto, ON: University of Toronto Press.
3. Zadek, S., Pruzan, P. and Evans, R. (1997), “Need for the rise of social accounting; Building corporate accountability”, 3rd edition, London Earthscan.
4. Jeffrey, C. (2008), “Relevance; Research on professional responsibility and ethics in accounting”, Bingley: Elsevier JAI.
5. Canon, (2015), “Marketplace-Certification - Canon Malaysia – Personal”, [online] Available at: <http://www.canon.com.my/personal/web/company/about/green-certification> [Accessed 7 Feb. 2015]
6. Canon, (2015), “Environmental initiatives - Canon Malaysia – Personal” [online] Available at: <http://www.canon.com.my/personal/web/company/about/environmental-initiatives> [Accessed 27 Feb. 2015]
7. Canon, (2015) “Canon-Workplace-Environment” [online] Available at: <http://www.canon.com/environment/vision/charter.html> [Accessed 27 Feb. 2015].
8. Canon, (2015), “Corporate Social Responsibility - Canon Malaysia – Business” [online] Available at:<http://www.canon.com.my/business/web/company/about/csr?languageCodeEN> [Accessed 27 Feb. 2015].

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