Social Accounting Meaning Example Top 3 Types

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#1 – Environmental Accounting

It provides information about the impact on the natural environment. In other words, it can provide information regarding how an organization’s activity impacts land, soil, climate change, Air, change in water, reduction in natural resources such as coal, zinc, petrol, Gas, etc.

#2 – Sustainability Accounting

Also known as corporate social responsibility, it provides social and economic sustainability information. It directly impacts society, the environment, and the economic performance of an organization. For example, using materials through the recycling process can help become more sustainable.

#3 – National Accounting

It refers to accounting techniques that analyze the economic activity of a nation. It analyses the total expenditure incurred by the country to perform a business activity. For example, a government has to record its spending on each project to avoid misuse.

Apart from the regular audit, they conduct special audits to know if there is any misuse of expenses.

Example

Corporate Social Responsibility like the construction of a hospital in their local areaThe paper manufacturing sector uses waste paper to recycle the same to produce paper.Manufacturing units are set up outside the local area because of the release of toxic air, harmful to both living and nonliving things.Use of waste disposal techniques to avoid water pollution.

Benefits

It built trust in society through its transparency.It is beyond financial reportingFinancial ReportingFinancial reporting is a systematic process of recording and representing a company’s financial data. The reports reflect a firm’s financial health and performance in a given period. Management, investors, shareholders, financiers, government, and regulatory agencies rely on financial reports for decision-making.read more because it covers social impact.It provides information to the government, people, society.It helps achieve social objectives by providing transparent information.It is also helpful in measuring social cost-benefit analysisCost-benefit AnalysisCost-benefit analysis is the technique used by the companies to arrive at a critical decision after working out the potential returns of a particular action and considering its overall costs. Some of these models include Net Present Value, Benefit-Cost Ratio etc.read more.

Limitations

It is a notional cost, and therefore, non-monetary.It does not impact on financial terms of financial reporting.