Question

discuss three major social roles of accounting

Answer 1

Solution. An organization when it starts a business sets a general target of meeting profit in order to sustain in market competition along with social impact in society. To meet this target, proper financial planning and controlling needs to be done. Accounting helps an organization in maintaining its financial records and helps an organization in decision making activities.

Three major social roles of accounting are enlisted below:

1.Accounting lists rules and regulation according to which an organization is required to prepare and publish its financial reports. Such financial reports provides stakeholder's a true picture of its investment money activities. An investor can study such reports to get a true picture of the organization's financial condition while operating in future before investing.

2.Accounting activities helps in providing true financial liability details to the government which the organization owes. An organization needs to pay taxes for operating in business market on the amount of profit it earns. Government invests such taxes for society and environment development as whole.

3.Social accounting helps in determining and reporting people who encompasses customers base, on its usage of resources, emission of pollution, and other factors which affect environment and society as whole. An organization conducts business using resources which belongs to the environment, any undesirable affect needs to be controlled and proper utilization is needed to make them equally available to future generation.