Question

In: Accounting

Using positive accounting theory as a theoretical basis, explain why a firm might voluntarily choose to...

Using positive accounting theory as a theoretical basis, explain why a firm might voluntarily
choose to disclose corporate social responsibility (CSR) information? Can the reporting be
explained by adopting institutional theory or other theories?

Solutions

Expert Solution

ANSWER: Corporate social responsibility (CSR) reporting refers to a company's systematic disclosure of information on its social performance. The term social performance is understood in a broad sense and refers to social, environmental, and governance issues that are typically not covered by financial performance metrics.The four types of Corporate Social Responsibility are philanthropy, environment conservation, diversity and labor practices, and volunteerism.Positive accounting theory (PAT) is concerned with predicting such actions as the choices of accounting policies by firms and how firms will respond to proposed new accounting standards. Positive accounting theory helps us reconcile efficient securities market theory with economic consequences.Corporate social responsibility (CSR) is a company’s commitment to manage the social, environmental and economic effects of its operations responsibly and in line with public expectations.Corporate social responsibility is important to both consumers and companies.Corporate responsibility programs are a great way to raise morale in the workplace.institutional theory suggests seeking to place CSR explicitly within a wider field of economic governance characterized by different modes, including the market, state regulation and beyond.The present practice of corporate social responsibility (CSR) has been depicted and informed by three CSR theories: The stakeholder theory of CSR. The business ethics theory of CSR. And the shareholder value theory of CSR.Corporate Social Responsibility (CSR) is a mechanism by which companies hold themselves to a set of legal, ethical, social and ecological standards. It is a form of business self-regulation that has developed alongside greater public awareness of ethical and environmental issues.The purpose of corporate social responsibility is to give back to the community, take part in philanthropic causes, and provide positive social value. Businesses are increasingly turning to CSR to make a difference and build a positive brand around their company.this is about CSR.


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