Question

What is social accounting and why do companies engage in it?

Answer 1

Social accounting can be defined in many ways:

I like to define it as the process of measuring, monitoring, and reporting to stakeholders the social and environmental effects of an organization’s actions.

Companies engage in it because,

1)  It counters the adverse publicity or criticism leveled by hostile media and voluntary social organisations.

2) It assists management in formulating appropriate policies and programmes.

3) It improves employee motivation.

4) It improves the image of the company.

5) It helps in marketing through greater customer support.

6) It improves the confidence of shareholders of the company.

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