Report the Role of Accounting in Organizations and Society

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The Role of Accounting in Organizations and Society

Accounting plays an important role in interfacing society and organization. As it is also mentioned in Burchell article “it is presumed that accountings are there to facilitate organizational and social actions.”As we know that accounting is helpful for structuring of organizational objectives, to reduce financial risk, to make financial decisions, it also helps organization to take into account different stakeholders interest like investors, suppliers, customer, etc, which automatically creates a strong bond between organization and society. There are three important accounting phenomenons’ that were discussed in Anthony Hopwood article. Accounting as a changing phenomenon: Now a day’s accounting is not just dealing with organizational aspect but new accounting aspects are also included like environmental or social accounting, such as Corporate Social responsibility. In developed countries like Scandinavian and other European companies, all have to allocate some cost for social and environmental aspects and are held accountable. Now it is necessary for an organization to keep environmental aspect into its mind and be friendly with environment. It is due to society’s pressure that drags organizations to change their basic objective from profit making to socially hold responsible for their economic activities. Management practices such as mass production to achieve economies of scale had increased pollution hence increased pressure on them by society such as environmental activist, people living near factories, government policies of being environmental friendly ,to minimize the pollution to add environmental accounting into management practices.

Accounting as a heterogeneous Phenomenon: Accounting practices varies from country to country because of conflict of interest between various stake holders such as governments, shareholders, and social activist for example in developed countries...
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