Page 71 - DCOM409_CONTEMPORARY_ACCOUNTING

Contemporary Accounting

Notes

Notes Suggestions for Better Social Reporting
With the changing social and economic realities there is a need for reorienting the
accounting system to serve the public interest in the widest context and meaning. In order
to witness better social reporting by the business houses the following suggestions are
offered:
1. Reorienting the Accounting System: The accounting system should be designed in a
way that incorporates some aspects of social reporting.
2. Statutory Provision in the Companies Act, 1956: It is suggested that Company Law
may be amended in a way to make such disclosures mandatory for the company. It
is also suggested that the Sachar Committee Report should be implemented. In
addition to it the memorandum of association should contain a clause that states
about the social obligations of the company.
3. Proper Format for Social Reporting: It is suggested that the social reporting format
may be devised on the lines of Final Accounts format. This will not only bring about
uniformity in reporting, but will also make the reports better understood by the
readers. In order to make social reporting more effective and useful, attempts should
be made by accountants, accounting bodies, social scientists and accounting
researchers to develop a useful and feasible social reporting framework.
4. Social Reporting Disclosures be developed: It is suggested that like other accounting
disclosures, a social reporting disclosure may be developed.
5. Social Audit: There should be a mandatory requirement on the part of the auditor to
make a specific mention in his report about the manner in which social aspects are
reported.
6. Proper Publication: There should be regular publication of the social accounts. This
will help to study the comparative social performance of the company. Further,
after a certain fixed amount of turnover, the company should be subjected to
compulsory annual/periodical social audit.

Self Assessment

Fill in the blanks:
6. Social reporting is equally important for both the ………… and the society.
7. There should be regular …………. of the social accounts.

8. Relevant information is that which provides for public accountability and also facilitates
public decision-making regarding capital choices and ……………..allocation.

5.3 Scope of Social Reporting

The following are the major aspects that are covered in social reporting:
Community Development: This includes activities benefiting the general public e.g., food
programme, community improvement and financing of health services, etc.
Human Resources: This area includes social performance directed towards the well being
of employees. For example, training programmes, promotion policies and provision for
job enrichment, etc.

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