There are many applied approaches to corporate social reporting. They range from simple ‘narrative disclosures’ which provide nonfinancial qualitative information about social responsibilities discharged by the concerned company to ‘financial disclosures’ which provide financial or quantitative information about the same. This paper examines the existing models of corporate social reporting and aims to develop a suitable model for Indian companies.

In recent years, the role of accounting in discharging social responsibilities has been strongly recognized by the business houses in India. In 1961, the American Institute of Certified Public Accountants (AICPA) defined accounting as “an art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are in part at least of financial character and interpreting the results thereof.” The changing environment has broadened the area of accounting. The change has come from conventional financial accounting based on profit to social responsibility accounting based on the social role of the business organization. This has happened because the entities have realized that they are accountable to the society which provides the scarce resources.

Our society consists of financial and nonfinancial stakeholders. Financial stakeholders require financial information while nonfinancial stakeholders require information about the impact of corporate operation on them. Corporations cater to this information requirement of nonfinancial stakeholders through social accounting (Ghosh, 2004).

According to F E Perry’s Dictionary of Banking (1989), “social accounting is the reporting of the cost incurred in complying with antipollution, safety and health, and other societal beneficial requirements, and more generally, the impact of business entity on its amenities and the environment.” Thus social accounting is concerned with the external and internal reporting of social benefit costs, both in quantitative and qualitative terms by a business enterprise.

In India, corporate social accounting is still in its infancy. Many companies still do not consider it as an integral part of their statement, as this aspect has not been made mandatory. Moreover no format has yet been developed for reporting the social accounts or preparing the social balance sheet of the companies (Kumar et al., 2004). As the business entities are yet to realize the importance of social accounting, they often neglect it.

Last year, the Indian Government requested all the companies to furnish details of their corporate social responsibility investment during the year. As this could lead to some sort of compulsion on the companies in future, this move did not get favorable support from Indian industries (www.justmeans.com/editorials, August, 2010).

Accounting Research and Audit Practices, Economic Performance, Millennium Development Goals, Corporate Sustainability, Economic Transactions, Social Management, Environmental Accounting, Corporate Houses, Environmental Management System, Community Development, Waste Management, German Firms, United Nations Environment Program.