Accountants, auditors and accounting standard setters in recent years have been subject to extensive criticism for...

Accountants, auditors and accounting standard setters in recent years have been subject to extensive criticism for the passive role they have taken in relation to reporting of sustainability and CSR activities. In addition, the conceptual framework of accounting does not guide accountants to prepare sustainability/ CSR reports, which could potentially be useful for stakeholders’ decision-making. Explain why accountants have taken such a passive role in relation to sustainability/CSR reporting. Your response must be supported with well-reasoned arguments? Explain clearly with examples

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Expert Solution

A CSR, corporate social responsibility or sustainability report is a periodical (usually annual) report published by companies with the goal of sharing their corporate social responsibility actions and results. The report synthesizes and makes public the information organizations decide to communicate regarding their commitments and actions in social and environmental areas. By doing so, organizations let stakeholders (i.e., all parties interested in their activities) aware of how they are integrating the principles of sustainable development into their everyday operations.

The main intention of a CSR or sustainability report is to improve the transparency of organizations’ activities. The goal is twofold:

On one hand, CSR reports aim to enable companies to measure the impact of their activities on the environment, on society and on the economy (the famous triple-bottom-line). In this way, companies can get accurate and insightful data which will help them improve their processes and have a more positive impact in society and in the world.

On the other hand, a CSR or sustainability report also allows companies to externally communicate with their stakeholders what are their goals regarding sustainable development and CSR. This allows stakeholders such as employees, investors, media, NGOs, among other interested parties, to get to know better what are the short, medium and long-term goals of companies and make more informed decisions. These decisions can spread from investing in a business, buying its products, writing positive (or negative) reviews, among others.

Objective and Role of Accountant-

The essential objective of this report is to raise awareness amongst professionally qualified accountants of sustainability issues and to highlight some of the opportunities available to them as a direct result of developments related to sustainability.

A second objective, relevant to a wider readership, is to demonstrate the relevance of accountants’ skills to the broad and potentially confusing range of initiatives and issues associated with sustainability. Reporting and assurance figure prominently but are far from the whole story.

A third and more ambitious objective is to assist public discussion and agreement on effective ways of promoting sustainability. This ambition is based on a belief that the approach adopted in this report to analyse the role of accountants has wider applicability.

As this report proposes a new approach to sustainability and the role of accountants in contributing to sustainability, it will be helpful at the outset to identify what sustainability is, how sustainability is reported, why it is important and what issues it raises.

ekkarill92 answered 1 year ago

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