social and ethical accounting

Question 1

What is social Accounting

Answer 1

Social accounting refers to the motives of the firm and the principle that there exist other considerations that
must be taken into account other than merely profit maximization, its a moral responsibility

Question 2

pros of taking social acc into account (2)

Answer 2

 Improved reputation/increased profits in future.
 Consider matters such as the environment and impact on the community not just financial matters

Question 3

cons of taking social acc into acc (2)

Answer 3

 May reduce profits in the short run.
 In the final analysis the business must be profitable.

Question 4

significance of non financial factors (6)

Answer 4

• Future Performance as the businesses impacts the workers, community and environment
• Consideration of these factors may lead to a more motivated workforce which may increase profits
• Need to gain a good reputation which adds to brand value.
• Some organisations are non-profit making e.g clubs and societies.
• Intangible assets give a company a sustainable edge over competitors.
• many investors look for firms that align w their morals

Question 5

evaluation of “significance of non financial factors” (why profit maximization needed) (4)

Answer 5

• Profit is the main driver to reward entrepreneurship.
• Businesses must make sufficient profit to pay costs and replace non-current assets.
• Maximising profit may lead to efficient control of costs.
• Profit ensures that the business is a going concern.

Question 6

ethics in accounting analysis and decision making (4)

Answer 6

• Accuracy and Transparency
• Avoiding Misrepresentation
• prioritize the public good over personal gain
• Compliance with Standards

Question 7

ethical dilemmas for accountants (2)

Answer 7

Pressure to Meet Targets
Confidentiality vs. Public Interest

Question 8

features of ethics (4)

Answer 8

• Considers the rights and wrongs of actions.
• Moral aspects of actions taken
• Ensures long term sustainability for firm and society
• there is a code of ethics

Question 9

features of social accounting (3)

Answer 9

• Considering wider factors in decision making. e.g non-financial
• no code of social accounting
• Considers community, environment, effect on employees.