SOCIAL &

ETHICAL
ACCOUNTING

Group 11 :
Berlian Jingga Pesona
Fadiah Rianus
Wildatara Wandari
SOCIAL ACCOUNTING
– Belkoui (2000)
“Socioeconomic accounting is the process of ordering, measuring and disclosing
the impact of change between a firm and it’s social environment”
– Mathews and Perera
“social accounting is to describe a comprehensive form of accounting which
takes into account externalities (the cost imposed on the public by private sector
organizations) as well as more usual private costs”
Objectives and Scope of Social
Accounting
– According to Sueb (2001) basically a social accounting aims to measure and
disclose the costs and benefits and social costs incurred by the company's
activities on the community.
– While the scope of social accounting is still under Sueb (2001 ) include
accounting for social impact at the micro and macro level . Micro
Socioeconomic accounting is intended to measure and report the impact of
corporate behavior towards the environment . Macro Socioeconomic
accounting include evaluation , measurement , and disclosure of social
performance in macro.
SOCIAL COST

– Environmental costs are incurred as a result of the company's activities that

have an impact on the environment . Companies are different in defining
environmental costs , this depends on how much information is used and the
scale and the scope of its examination ( Astuti , 2002).
Grouping environmental costs are divided into three (3 ) types, namely : ( White
and Savage , 1995) in Irawan (2001 )
1. Conventional Company Costs;
2. Less tangible items (including savings and revenue streams) dan;
3. External costs.
SOCIAL PERFORMANCE/
ENVIRONMENTAL PERFORMANCE

– According Purwanto (2003 ) , environmental performance is the measurable

results of the environmental management system , which is associated with
control of its environmental aspects
– Environmental performance can be measured quantitatively is the result of the
environmental management system related control aspects of the physical
environment. While the environmental performance can be measured
qualitatively is a result of matters related to the size of the non-physical assets ,
such as procedures, the process of innovation, motivation and morale
experienced by perpetrators of human activity , in realizing the organization's
environmental policy , objectives and targets.
Type Environmental
Performance Indicators
1. Lagging indicators that measure the performance of end -process , measuring
the output of the result of processes such as the amount of pollutants
released
2. Leading indicators that measure the performance of in-process.
WHY ARE REQUIRED
ENVIRONMENTAL PERFORMANCE
EVALUATION ?
– Environmental performance indicators quantitative companies do not always
correspond to the needs of consumers, in this case the consumer is the
environmental policy of employees (internal), communities, customers,
investors, and government (external) . It is therefore necessary understanding
of customer needs and the ability to form environmental performance to meet
those needs . Customer needs known through surveys, direct contact, contact
marketing, and so on . While the ability to form environmental performance as
needed, to be reached through the company's environmental performance
evaluation model
ETHICAL ACCOUNTING
The word 'ethical' comes from the Greek word 'ethos' (character) and the
Latin word 'customs' (custom). Taken together these two words determines how
individuals choose to interact with each other. Thus, ethics is about choice. It
signifies how people act to make the choice that is 'right' and result in behavior
that is 'good'.
Accounting ethics is primarily a field of applied ethics and is part of
business ethics and human ethics, the study of moral values and judgments as they
apply to accountancy. It is an example of professional ethics. Accounting
introduced by Luca Pacioli, and later expanded by government groups, professional
organizations, and independent companies. Ethics are taught in accounting courses
at higher education institutions as well as by companies training accountants and
auditors.
IMPORTANCE OF ETHICAL
ACCOUNTING
– The nature of the work carried out by accountants and auditors requires a high
level of ethics. Shareholders, potential shareholders, and other users of the
financial statements rely heavily on the yearly financial statements of a
company as they can use this information to make an informed decision about
investment. They rely on the opinion of the accountants who prepared the
statements, as well as the auditors that verified it, to present a true and fair
view of the company. Knowledge of ethics can help accountants and auditors to
overcome ethical dilemmas, allowing for the right choice that, although it may
not benefit the company, will benefit the public who relies on the
accountant/auditor's reporting
GOALS OF ACCOUNTING ETHICS
EDUCATION
Seven goals of accounting ethics education are :
– Relate accounting education to moral issues.
– Recognize issues in accounting that have ethical implications.
– Develop "a sense of moral obligation" or responsibility.
– Develop the abilities needed to deal with ethical conflicts or dilemmas.
– Learn to deal with the uncertainties of the accounting profession.
– "Set the stage for" a change in ethical behavior.
– Appreciate and understand the history and composition of all aspects of accounting
ethics and their relationship to the general field of ethics.
ETHICS AND PROFESSIONAL
PRACTICE
– It is extremely important for accounting professionals to be ethical in their
practices due to the very nature of their profession. The nature of accountants’
work puts them in a special position of trust in relation to their clients,
employers and general public, who rely on their professional judgment and
guidance in making decisions. These decisions in turn affect the resource
allocation process of an economy. The accountants are relied upon because of
their professional statues and ethical standards. Thus, the key to maintaining
confidence of clients and the public is professional and ethical conduct.