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Accountancy Futures | Corporate reporting | Sustainable development

Since the public is paying more and more attention to corporate social responsibility, CSR reports have become a new way for enterprises to release information. They also enable the public to measure and supervise an enterprise’s CSR performance. The emergence of social responsibility accounting and social responsibility reports has had a huge impact. First, it has changed the thinking patterns of traditional accounting, which tends to adopt a closed and onedimensional thinking pattern. That is, it regards a company as an independent system and is only concerned with the enterprise’s financial situations and its operating results. The enterprise is simply a subordinate unit of the economic system. However, social responsibility accounting adopts an open thinking pattern, placing the enterprise into the whole society, taking it as not only a subordinate unit of the economic system, but also a subordinate unit of the political, environmental and social system. This transformation has triggered a revolution in the field of accounting academic ideology.

Social enterprise Second, CSR has helped to coordinate the relationship between the enterprise and social environment. The theoretical basis of traditional accounting is to treat the enterprise as a pure economic organisation, or a profit organisation, rather than a social one. Thus the aim and mission of an enterprise is to make the biggest profits. Profit is considered to be an enterprise’s only contribution to the society. Under this view, when making strategies, managers tend to focus on ways to maximise profits and ignore social responsibility. From the CSR point of view, however, the enterprise is not only an economic organisation, but more importantly, a social one. It is a basic cell of society. Thus the aim and mission of the enterprise should also place emphasis on social responsibility and legal requirements, committing itself to improving society. An accountant should properly recognise, measure

‘If accountants only provide

information on an enterprise’s profits, they exclude the interests of most people’ Papier mache pandas in Hong Kong as part of a world tour to highlight the fact that there are only 1,600 living pandas left in the wild.

Demonstrators wearing masks of world leaders at the recent UN Climate Change Conference in Lima, Peru. 48 | Edition 10

and report information on how the enterprise achieves this aim and mission. If they only provide information on the enterprise’s profit objective, accountants exclude the interests of most people in society, which may induce the enterprise to ignore social benefits and go against the direction of social development. Social responsibility accounting can use its own mechanism to report social responsibility performance, reflect social benefits and operating costs, and hence coordinate the relationship between the accounting unit and society. In the 21st century, China’s State-owned Assets Supervision and Administration Commission (SASAC) and the Stock Exchange have respectively required enterprises to disclose their social responsibility information. External environmental pressure and greater public awareness of social impacts have urged enterprises to consciously choose the road of sustainable development. In 2013, nearly 800 enterprises in China published CSR reports. Such reports will develop in a more comprehensive way in the future through an organic combination of financial and non-financial indicators as well as an organic unity of economic, environmental and social performance. ■

Accountancy Futures – Issue 10