THE ROLE OF ACCOUNTING IN ENHANCING CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is self regulated initiative to integrate a certain business to the society and its welfare. These are voluntary ethical and moral standard activities of the company to show their concerns to their employees, stake holder, government, costumers and the community. They take part and share their investment to reach people. Activities like clean and green, sponsorship training, scholarship to less fortunate children, street lighting and other activities that involve helping people are just some examples of the CSR.
The mission of CSR is the welfare of the society in general. Corporate Social Responsibility may or may not be a part of their promotion scheme since they are visible to the activities they provide. Customers and the community may perceive that the company is doing its part to participate in a humanitarian program being a well respected and progressive company.
To be able participate and compete in the game of Corporate Social Responsibility they must perform or balance their accounting system if they are willing and able to meet their budget for a cause. Their balance and accounting system will be the one to predict if they have enough capability to handle such task of helping their employees, stakeholder and the community or they can simply show to the public their transparency of their capital assessment as a tool for corporate communication compliance to the government.
The role of accounting is to provide a sustainable framework reporting to the public and provide them the guidance of what has been happening around the company, mostly the annual stock holders meeting manual shows all the reports including the activities that the company has performed during the year. Their yearbook also includes financial statement of accounts including statement of assets, liability and capital.
Through this accounting reports the participant and the public can change their perception and participation to the company if for example there are stockholders who are willing to invest or sell their stocks to other people they can do so and the accounting system release to the public will be their indicating factor and this is another reason how accounting system works in a socially responsible company.
The financial statement accounting report shows the performance and their success in pursuing their maximum potential within the year. People may also presume that the company who reports to the public their accounting system proves that they are responsible and can be highly trusted by the community, stakeholder and their consumers. Transparency is significant and much more valuable than trust is concerned here as a socially responsible organization.
The financial statement may also show some strength and weaknesses involved, in some cases their reports also show that there are areas for consideration that needs to improve and the stakeholder realize this facts. Some companies hide or delete some details that may affect their customers negative perception about their performance if they realized that they reports are not well acceptable and thereby a fraud or negligence is concern. This goes to show that companies who often do this has a hidden agenda to monopolize their business for they do not show the real transparency of their reports.
To provide realistic approach in accounting and financial reports, a company may even hire an auditing firm to audit their company if their financial situation is true and honest. The auditing company will be the one to confirm the company’s internal and external transaction that arises during the year. Although the integration of auditing firm is not always necessary but to be able to conduct a more precise and meaningful Corporate Social Responsibility reporting the auditing firm conduit may be required.
The government can also assume that the reports shows and withheld company taxes and other fees are paid and reflected in their financial reports. All transaction and liquidation of how their corporate expenditure, bank credits and funding is also shown, if there are account receivable and payables regardless of accounts may also be included. All this accounting reports are a complete determinants and a transparent productivity of a company that shows their integrity through which is in fact a bigger part of their Corporate Social Responsibility to administer to the public most issues and controversies if there is any can be settled here.
The role of Accounting in enhancing the Corporate Social Responsibility is then fulfilled if they have completely and voluntarily put into practice their obligation in reporting to the public their contribution to the society. Usually the people are enlightened and trusting to the honesty of the company, the effects of Social Responsibility has always been positive, fulfilling and most of all progressive on the part of the company and the society.
Credit:ivythesis.typepad.com
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