Question

2. The article “The Expanding Use of Sustainability Reporting” gives an overview of the growing importance of Corporate Sustainability Reporting (CSR).

Required: a.What is the SASB(Sustainability Accounting Standards Board) and what is its role in accounting?

b.Give two advantages for investors and creditors of CSR

c.Give two challenges faced by accountants regarding CSR.

Answer 1

a) Meaning of SASB:

Sustainability Accounting Standards Board(SASB) is a non-profit organization that sets the standards of financial reporting. It sets the various standards that the accountants are required to follow while doing the accounting of corporate social responsibility.

b) Advantages for investors and creditors of CSR:

Easier access to capital: Most of the capital providers are interested in providing the capital to the firms that follow the CSR nowadays, thus, it will provide easy access to the capital, also the investors and creditors will be encouraged to provide the capital to such organization.

Enhanced reputation among customers: The firms that follow the CSR generally have a good reputation among the customers, so the investors and creditors feel motivated that they will get a good return on their investments.

c) Challenges faced by accountants regarding CSR:

Complicated estimations: The accounting for CSR is typically based on estimation which is generally difficult to make.

The challenge to comply with standards: The accounting for CSR needs a high degree of knowledge of the standards set by the SASB to comply with such standards.