Page 70 - DCOM409_CONTEMPORARY_ACCOUNTING

Unit 5: Social Reporting

Health and Safety Notes
Stakeholder Relationships
Corporate Social Investment

Employment Equity
Products and Services

Self Assessment

Fill in the blanks:
1. ……………is reporting on those activities of an organisation that have an impact on
society at large and are not necessarily represented by its traditional financial report.

2. The concept of ………….extends beyond the provisions embodied in current law.
3. Social reporting presently is being either included in the Annual Reports or finds some
reference in the Chairman’s Address or the …………..Report.

4. Social reporting ………….. tends to vary from one company to another company as till
date no format has been described by any Act in India.
5. A social report is the result of a thorough evaluative process focused on the social impact
of a business on all its various …………….

5.2 Need of Social Reporting

It has now become important for companies to identify society’s changing needs. Only a project
that yields economic return while satisfying social priorities should be accepted. Thus, the
priorities of the society in today’s environment need to be looked at. In addition to this, there
has been an increase in the number of ethical investors who believe that they should avoid
investing in those companies that are believed to be causing social injury or environmental
damage of one type or the other. So social reporting is equally important for both the management
and the society.

The following are the key objectives of social reporting:
To identity, measure and report the net social contribution of an individual firm towards
society, this includes not only the costs and benefits of a firm internally but also those
arising from external factors affecting the different segments of the society.
To determine whether the individual firm’s strategies and practices are consistent with
widely shared social principles of the society.

Example: Discrimination on the basis of caste, creed or sex will not be considered a good
practice by the society.
To make available relevant information about the firm’s goals, policies, programmes,
performances, use of and contribution to scarce resources etc. Relevant information is that
which provides for public accountability and also facilitates public decision-making
regarding capital choices and social resources allocation.

Example: Indian companies have to disclose their use and earnings of foreign exchange.

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