Social Accountability in Accounting Global Corporations

Question: Discuss about the Social Accountability in Accounting for Global Corporations. Answer: Introduction Accountability is defined as the obligation of those individuals who hold positions of power in the society to be accountable and responsible for their actions. The power holders can belong to different fields of the society such as financial, political, industrial, etc. and they generally include government officials who are holding important positions or business leaders in private global corporations and civil society organisations. The concept of accountability is an inherent aspect that aims to create a social compact between the normal citizens and their elected representatives who are functioning within a democracy. Social accountability is the process of reaffirming and redefining the accountability relationships which exist between the country and its citizens. Social accountability essentially encompasses the broader range of actions and processes which goes beyond the process of voting. By the process of social accountability, citizens of a country can hold their governmen t accountable for their actions and decisions and this is also applicable to business establishments, civil society, media and other domains which are in the process of facilitating these efforts (Bebbington et al. 2008). People or civil society have time and again carried out the process of holding the government responsible for their actions by organising public demonstrations, advocacy campaigns, protests, investigative journalism and public interest lawsuits. The advances made in the world of science and technology has played a vital role in the efficient extraction of data and information and at the same time also expanded the utilization of the data and information that is obtained from various sources. Social accountability helps in ensuring that all the state actors are performing their duties in an ethical and socially responsible manner. This has helped in enhancing the scope of opportunity for ensuring proper engagement between the civil society and the state and thus contributed immensely towards the adoption of a new and modern social accountability practices (Mook et al. 2007). In case of business establishments, social accountability plays a vital role in ensuring that the business establishments are carrying out their operations in such a manner so that it can satisfy the interests of their stakeholders in the market. It helps in ensuring that business establishments are operating their business in a socially responsible manner and they are not operating their business merely for the purpose of maximizing their profits from the market. Thus, social accountability can be considered to be the cornerstone of good corporate governance which enables a business establishment to create a good and positive reputation in the market. Social accountability plays a vital role in ensuring that the business establishments are strictly adhering to the business guidelines and regulations which are practiced within a nation and thus it helps to bring forth a significant level of transparency in the business transactions of an organisation (Bovens, 2007). Critical Analysis Social accountability is a very important aspect in the corporate sector and it can have far reaching consequences for an organisation if they are unable to understand and implement an element of social responsibility within their business operations. There are a lot of benefits which could be attained by the business establishments if they try to incorporate social accountability within their business. The benefits of social accountability in case of business establishments have been mentioned below: Social accountability enhances and enriches the effectiveness of the corporate governance structure that is being followed by the different business enterprises in the market (Parker, 2011). Social accountability plays a vital role in increasing the corporate accountability of an organisation in the market by ensuring an effective communication between the management of an organisation and their stakeholders. This helps in clearly defining the main business goals and missions of an organisation and how they intend to realise their business objective sin the market. Social accountability plays a vital role in solving the ever growing problem of incomplete information exchange between an organisation and their stakeholders (Gilbert asche, 2007). Social accountability plays a vital role in improving the business strategies of an organisation by facilitating a process of effective dialogue with their stakeholders. Thus, the business establishments are able to identify and understand the expectations of their stakeholders and this enables them to incorporate the necessary changes within their business policy so that it can effectively satisfy the interests and needs of the stakeholders (O'Dwyer Unerman, 2007). Social accountability plays a vital role in improving the brand reputation of an organisation in the market and thus it enables an organisation to attract potential investors for their future business endeavors. Bunnings Warehouse is the leading retailer and deals with products for home improvement and outdoor living this company caters to customers from Australian and New Zealand. The organisation has been operating their business with the help of large warehouse networks. Smaller format stores, trade centers and frame and truss sites. The organisations clients include some of the reputed project builders, commercial establishments who are operating within the housing industry in both Australia and New Zealand. Social accountability is of vital importance for ensuring success of the company in high competitive environment. The organisation has a strong leadership at the helm who are always striving to provide their customers with the widest range of product and services which is backed by an effective quality of service which has played a vital role to enabling them to ensure that the customers are satisfied. The organisation operates their business operations in a sustainable manner and ha s always emphasised on ensuring that their business is socially responsible, environment friendly and economically viable (Cooper Owen, 2007). The element of social accountability is also evident in the business audits and financial reports which are released by Bunnings Warehouse every year. Bunnings Warehouse has been operating their business transactions with a lot of transparency and this has enabled the organisation to create a positive reputation in the market. Transparency in operations has been helpful gaining trust and loyalty of customers while ensuring a high profit margin for the company. Bunnings Warehouse has always strived to create value for their stakeholders in the market and the organisation always makes sure that all the business decisions are undertaken by considering the interests of their stakeholders (Osborne Ball, 2010). All the financial transcripts regarding the company performance in the market are property evaluated and analysed by third party independent auditors in order to provide the clear picture to their investors in the market. This has enabled the investors of Bunnings Warehouse to understand how the company is operating their business and how the company is presently performing in the market as compared to their business competitors. This high level of transparency reflects the accountability of the organisation towards their investors in the market. This shows that the management of Bunnings Warehouse operates their business with a high level of honesty and integrity. The management is well aware of their responsibility towards their shareholders and always tries to ensure that the interests of the shareholders are never compromised under any circumstances (Bebbington et al. 2014). The accounting process at Bunnings Warehouse consists of two stages. Firstly, all the information regarding financial performance are evaluated by the companys own auditors who are in charge of managing the companys finances. Secondly, the audit reports are sent to independent auditors in order to ensure that no financial irregularities has taken place during the companys own internal auditing process and that the financial statements which will be presented before their stakeholders are accurate in nature. This helps in ensuring that the shareholders and investors are given the accurate details regarding the companys financial performance in the market and this helps in restoring the faith of the shareholders on the organisation which is absolutely imperative for ensuring the long term growth and success of the organisation in the market (Zadek et al. 2013). Integrity, respect, teamwork, achievement and innovation lies at the heart of Bunnings Warehouse and these are the main elements which have enabled the organisation to succeed in their business over the years. The company adheres to all the legal guidelines and regulations which are in practice within the Australian market and they have paid to their taxes to the government in an honest and responsible manner. This helped the organisation to remain on the safe side of the law. The company has been able to remain in the good books of the government and legal establishments and this has enabled them to ensure the smooth continuity of their business operations in the market (Cooper Owen, 2007). By incorporating the aspect of social accountability in their accounting and auditing process the organisation has been able to ensure better and more effective utilization of their available resources and this has enabled the organisation to reduce their operational cost by helping them to minimize the wastage of resources. The company has been able to ensure better allocation of resources by ensuring an effective capital budgeting for their business. This has indeed been helpful for the company in ensuring growth and success of the company while giving the company a competitive advantage over others in the industry (Nicholls, 2009). Recommendations The work done by Bunnings Warehouse is indeed commendable and deserves all our praise. However, there is no reason to become complacent with their achievements. There is further scope for improvement in the process of social accountability which takes place within Bunnings Warehouse. The organisation could further enhance the overall effectiveness of their social accountability in the accounting process if they incorporate the following steps which have been mentioned below: Bunnings Warehouse needs to incorporate all the latest technologies at the workplace which will enable them to ensure more accuracy in the process of business accounting and auditing. The organisation needs to utilised all the latest accounting software in their business which will enable them to provide a highly accurate and reliable financial statements to their stakeholders in the market (Gilbert Rasche, 2007). The mission and vision of the organization needs to be properly conveyed to the employees of the company to make them familiar with the very same in order to operate the organization in a better and effective manner and this will help them in getting accustomed with the organisational behavior and their ethical code of conduct which are being utilised in their business. The organisation needs to recruit only qualified and experienced accountants who has served in other organisations and has relevant experience regarding corporate accounting and book keeping and this will help the organisation to further ensure that the aspect of social accountability is always emphasised on during the process of accounting (Owen, 2008). 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