Meaning of Social Accounting:-

The concept of ‘Social Accounting’ has gained importance as result of high-

level industralisation, which has brought prosperity as well as many problems to the society. It has

necessitated the corporate sector, with huge amounts of funds at their disposal, to invest substantial amounts

in social activities so as to nullify the adverse effects of industralisation.

Social Accounting, also known as Social Responsibility Accounting, Socio-

Economic Accounting, Social Reporting and Social Audit, aims to measure and inform the general public

about the Social Welfare activities undertaken by the enterprise and their effects on the society. Social

accounting is a method by which a business seeks to place a value on the impact on society of its operations.

This might include the following impacts on the environment: waste; the effect on society of the packaging

it produces; and how much fuel it uses in its company cars. It can also include the effect on the local

community who might have to live in the shadow of its premises, and how it engages with the community,

its customers and workforce.

(1) Managing risk (2) Reputation (3) Cost savings (4) Brand marketing for e.g. Hero Heart

According to National Association of Accountants (NAA) Committee:-

“ The Identification, Measurement, Monitoring and

Reporting of the Social and Economic effects of an institution on society.”

According to Milton Friedman (Economist):-

“A corporation's social responsibility is to make a profit.”

“'Social Audit is a method for organisations to plan, manage and measure non-financial activities and to monitor both the internal and external consequences of the organization’s social and commercial operations.”

Source: Social Audit Toolkit (1997) Freer Spreckley, Social Enterprise Partnership

OBJECTIVES OF SOCIAL ACCOUNTING

To identify and measure the net contribution of an individual firm towards the society. To determine whether an individual firm’s strategies and practices are consistent with widely

shared social priorities.

To make available relevant information about firm’s goals, policies, Programmes and performance towards use and contribution to scarce resources and social resource allocation.

To develop models of quantification and proper presentation of social costs and benefits of an enterprise.

To meet information needs of consumers and society.

FEATURES OF SOCIAL ACCOUNTING

o Social Accounting establishes relationship between firm and society.o Social Accounting is based on Social cost as well as Social benefits.

o Social Accounting is related to the use of Social resources.

o Social Accounting is an expression of companies Social Responsibility.

NEEDS / BENEFITS OF SOCIAL ACCOUNTING

It increases the goodwill of firm. It increases the market share of firm & Company.

Government provides Tax Benefits for this.

A firm fulfils its Social obligations and informs its members, the government and the general public to enable everybody to form correct opinion.

It assists management in formulating appropriate policies and Programmes.

It acts as an evidence of Social commitment.

It improves employees’ motivation.

Social Accounting is necessary from the view point of public interest groups, Social organisations, investors and government.

It improves the image of the firm.

Through Social Accounting, 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.