Insight of Social and Environmental Accounting in Australia - Research Proposal Example

Accounting practitioners’ perceptions and insight of social and environmental accounting in Australia Name Course Name and Code Instructor’s Name Date Introduction Various companies have increasingly been reporting publicly on various aspects of their environmental and social performance in recent past (See 2007). However, most of these reports have been providing fairly rudimentary and general qualitative, environmental and social performance information. By 2007, Accounting and Finance was the only Social Science Citation Index accounting journal in the academic writing of Australia and New Zealand. However, its contribution to stand alone environmental accounting research output between 2000 and 2005 was only a single journal article (Boyd & Banzhaf, 2007). This raises eyebrows as to whether the accounting professionals understand their role in the social and environmental accounting (Brown & Fraser, 2006). It has been said that accounting practitioners and accounting educators can play a vital role in the development of social and environmental accounting and reporting. Accounting profession has been linked to social and environmental accounting by underlying theories and concepts of social and environmental accounting (SEA) (See 2007). Thus, accounting professionals must understand their roles in social and environmental accounting development. This research paper aims at elucidation the accounting practitioners’ perceptions and insight of social and environmental accounting in Australia. The study will be guided by legitimacy theory. Literature review Historically, social and environmental accounting studies began in 1970s although 1960s played a crucial role in its development. At this time capitalism faced a lot of criticism and as such it wanted to legitimize its existence (Yongvanich & Guthrie, 2006). The idea of incorporating social aspect in business became accepted. The SEA has since then undergone much development through corporate social responsibility. It is now widely accepted that social matters are vital for economic prosperity of a firm (See 2007). As a result many firms have in recent past been providing on various aspects of their environmental and social performance in their annual reports (Owen, 2008). The 1980s decade saw many firms disclose social, ethical and environmental aspects of their firms. However, disclosures in 1990s were mainly about the environment than social matters (Aronsson, 2010). In the turn of the century, the importance of environmental matters saw many companies disclose their environmental responsibilities in separate reports from traditional way where the SEA received little if not attention in the annual financial reports. This could have been influenced by increased legislation which required firms to be environmentally accountable in all their dealings (Crowther, 2000). This could also have been influenced by the realization that environment was essential for the sustainability of the business. The interest in social and environmental matters was accompanied with increased academic writing and publications (Owen, 2008). It has been argued that social and environmental accounting and reporting are essential as tools for analyzing the sustainability of firms and as such they have been important issues in academic literature. The relationship between SEA and accounting profession has been cited in the underlying concept and theories of SEA (See 2007). This is evidenced in the acceptance by SEA advocates of the conventional accountability model to incorporate and extended array of stakeholders. In the understanding of conventional accountability among accountants, accountability is the basic assumption in traditional accounting that shareholders raise accountability mechanisms for the purpose of protecting their interests (Owen, 2008). This is supported by the argument that account emphasizes financial information that is solely intended for the shareholders and creditors (Boyd & Banzhaf, 2007). However, SEA goes beyond the precincts of serving the investors and considers the whole possible stakeholders that are likely to be impacted on by the business such as the society and the environment. Thus, SEA addresses the inherent limitation in conventional accounting and cites the responsibility of accountant to the environment (Owen, 2008). Thus, SEA draws from professional attributes such as rendering of public service and being concerned with social issues. For a long time, accounting as a profession has been questioned. It has been argued that even though accounting bodies have pledges to the public and society enshrined in their constitution, their attention has mainly focused on accounting and auditing dimensions in processes of politico-economic calculations and regulation (See 2007). It has been argued that accounting practitioners are key actors who are involved in the struggle of occupation to establishing themselves as professions (Boyd & Banzhaf, 2007). However, accounting educators have also been found to be essential in the development of SEA. Contrary to the argument that accountants are vital in the development of SEA, their contribution to stand alone environmental accounting research output between 2000 and 2005 was only a single journal article in Australia and New Zealand. In addition, what is often reported in annual SEA reports provides fairly rudimentary and general qualitative, environmental and social performance information. Thus, a research on accounting practitioners’ perceptions and insight of social and environmental accounting in Australia is timely. Thus, this paper aims at exploring the perceptions and insights of accounting practitioners in Australia concerning social and environmental accounting. Objectives 1. To determine the knowledge, awareness, perceptions and insights of SEA among accounting practitioners 2. To ascertain the views of accounting practitioners in Australia on relevance of SEA issues to accounting profession 3. To imply the perception and insights of accounting practitioners of SEA to accounting practice with respect to SEA Theoretical background Reporting on social and environmental responsibility has been on the increase since 1990s. This trend can be explained through the need for businesses to legitimize their capitalistic ventures. Thus, they do so based on their desire of creating, maintaining or repairing their societal legitimacy. Thus the legitimacy theory provides probable explanation for the increase in SEA disclosures in recent past. This argument is augmented by the fact that the reporting used is lacking in that it provides fairly rudimentary and general qualitative, environmental and social performance information (See, 2007). The fact that accounting practitioners in Australia are contributing little toward SEA is a clear indication that either they are unaware of the significance of the issue to their profession or the firms in which they work do not emphasize the importance of the issues but rather uses them to legitimize their operations. According to legitimacy theory businesses operate in society through an expressed or implied social contract upon which their growth and survival are dependent (Boyd & Banzhaf, 2007). The theory tries to [provide explanation about the efforts of corporate entities to narrow any perceived legitimacy gap as a way of avoiding sanctions form the community ion which they operate. The firms also reports on SEA issues just to comply to laws and regulations currently in place in order to remain legitimate rather than perceiving SEA as an essential component of their businesses. Thus this paper is guided by legitimacy theory in seeking the accounting practitioners’ perceptions and insight of social and environmental accounting in Australia. Research question justification The study seeks to elucidate accounting practitioners’ perceptions and insight of social and environmental accounting in Australia (Boyd & Banzhaf, 2007). This is essential because currently the reports on SEA from many countries are not comprehensive and hence lacking in content (Idowu & Filho, 2009). In addition, the contribution of Australian accountants in to SEA literature is minimal and this is an indication that accountant practitioners are either unaware or do not see the importance of SEA in their professional practice (See 2007). Thus, this study seeks to answer the question as to whether accounting professions are aware and knowledgeable of the importance of SEA in their profession by finding out their perceptions and insights on the SEA issue. Methods Questionnaires will be employed to collect data (Ball & Craig, 2010). They will be divided into two sections. The first section will deal with awareness, understanding and views on the functioning of accounting in regard to the elements that are promoted by SEA which includes non-financial and qualitative disclosures. This will help to elucidate the views of accounting practitioners on the role of accounting in relation to SEA (Boyd & Banzhaf, 2007). The second section will provide respondents profiles such as gender, race, religion, affiliations, qualifications and years of work experience. Ordinal scales will be used to measure respondents’ perceptions of and views on SEA while profile section will be nominal. Knowledge, awareness, and perceptions of respondents on SEA and corporate social disclosure (CSD) will be measured using a seven point Likert scale while the relevance of SEA issues will be measured using a five point Likert scale. The sampling of the respondents will use a convenience and purposive sampling. The study targets 1000 accounting practitioners practicing in various firms in Australia (Spence, Husillos & Correa-Ruiz, 2010). This approach will be used because easier accessibility of accounting practitioners in firms operating within Australia (Owen, 2008). The questionnaires will send via email and/or via mail with a self stamped return envelop. Significance of the research to theory and practice The findings of this study will provide practical explanation as to why very few accounting practitioners have been contributing to the growth and development of SEA literature (See 2007). It will also provide theoretical explanation on the lacking nature of annual SEA reports from various firm (Boyd & Banzhaf, 2007). Practically, the findings of the study will help in influencing the policy makers on what need to be done in the education of accounting professionals. It will also help in providing recommendation on what need to be done to enhance the growth and development of SEA as a profession and its literature. Conclusion Various companies have increasingly been reporting publicly on various aspects of their environmental and social performance in recent past. However, most of these reports have been providing fairly rudimentary and general qualitative, environmental and social performance information. By 2007, Accounting and Finance was the only Social Science Citation Index accounting journal in the academic writing of Australia and New Zealand. However, its contribution to stand alone environmental accounting research output between 2000 and 2005 was only a single journal article. This raises eyebrows as to whether the accounting professionals understand their role in the social and environmental accounting. This research paper aims at elucidation the accounting practitioners’ perceptions and insight of social and environmental accounting in Australia. The study will be guided by legitimacy theory. This is because it is argued that increase in SEA reporting in recent times is aimed at legitimizing the business operations of various firms instead of the importance that SEA issues hold in the well-being of the firm. Questionnaires will be used to collect the data and respondents will be recruited using convenience and purposive sampling approach. Ordinal scales will be used to measure perceptions and insight of accounting practitioners while their profiles will just be nominal. The questionnaires will be sent to respondents via email and/or mail with a self stamped return envelop. It is expected that results of this study will provide practical explanation as to why SEA reports are wanting and why Australian practitioners contribute less toward academic and practical development of SEA. It will also form the basis for policy development on how to address SEA issues. Reference Aronsson, T. (2010). Handbook of environmental accounting. London: Edward Elgar Publishing. Ball, A., & Craig, R. (2010). Using neo-institutionalism to advance social and environmental accounting. Critical Perspectives on Accounting, 21(4), 283-293 Boyd, J., & Banzhaf, S. (2007). What are ecosystem services? The need for standardized environmental accounting units. Ecological Economics, 63(2-3), 616-626 Brown, J., & Fraser, M. (2006). Approaches and perspectives in social and environmental accounting: an overview of the conceptual landscape. Business Strategy and the Environment, 15(2), 103-117 Crowther, D. (2000). Social and environmental accounting. London: Financial Times/Prentice Hall Idowu, S., & Filho, W. (2009). Professionals ́ Perspectives of Corporate Social Responsibility. London: Springer. Owen, D. (2008). Chronicles of wasted time? A personal reflection on the current state of, and future prospects for, social and environmental accounting research. Accounting, Auditing & Accountability Journal, 21(2), 240 – 267 See C.D. (2007). Social accounting at Traidcraft plc: A struggle for the meaning of fair trade', Accounting. Auditing & Accountability Journal, 20(3), 423 - 445. Spence, C., Husillos, J., & Correa-Ruiz, C. (2010). Cargo cult science and the death of politics: A critical review of social and environmental accounting research. Critical Perspectives on Accounting, 21(1), 76-89 Yongvanich, K., & Guthrie, J. (2006). An extended performance reporting framework for social and environmental accounting. Business Strategy and the Environment, 15(5), 309-321 Read More