Analysis
Corporate Social Responsibility is one of the best business models that helps the companies in being accountable for their activities to the companies who are dependent on the company for their interests. It is important that companies should comply with the regulations of the CSR, else there can be actions that can be initiated against them. In this assignment two articles have been downloaded that analyses this topic of CSR and provides certain conclusion or information on them that would be in some way or the other helpful to the stakeholders of the companies.
Analysis.
Reason for the Selection of the two articles.
The two articles that been selected are “CSR disclosure: the more things change…?” and “Descriptive, instrumental and strategic approaches to corporate social responsibility”. Both the articles are based on the concept of Corporate Social Responsibility. Three reasons why they have been selected are-
- The article highlights the needs of the CSR model and how companies are applying the methods based on which they can achieve these CSR needs. CSR is one of the major topic of accounting that needs to be highlighted in these topics.
- The articles highlight the need for disclosing the CSR requirements in the annual reports of the company and how that is beneficial for the stakeholders of the companies.
- The articles also highlight how there have been changes in the CSR requirement from past 1970s till today and how the overall companies are benefiting from these changes and how the stakeholders are also taking advantage of that.
- Purpose of the two studies and what research question(s) they set out to explore about the topic
The first article that has been selected is “CSR disclosure: the more things change…?” which has been written by Charles and his co-authors. The article has been selected as they are highlighting the needs for the disclosure of the CSR policies in their annual reports. It is one of the most important topic of mainstream accounting and analyses the impact of CSR reporting on the overall capital cost of the company (Charles H, et al., 2015). It highlights the difference in CSR reporting since 1970s, it also analyses one or the more features of CSR reporting and whether the same has been driven by market forces and their participants. The research questions that it puts up are-
- How CSR disclosure is important and how will companies benefit from them?
- How CSR disclosures have evolved from 1970s till today?
The second article that has been selected is “Descriptive, instrumental and strategic approaches to corporate social responsibility” that has been written by Giacomo and co-authors. The main purpose of this study is to investigate whether the overall strategic approach for Corporate Social Responsibility are related to the corporate performance of the company and if there is any method that has been applied to deal with their CSR approach (Giacomo, et al., 2013). There are different methods by which companies are dealing with their CSR and CSR needs. It helps in analysing the overall benefits received from CSR initiatives is used for the needs of all the stakeholders and other non-shareholders who are dependent on the company. This study integrates the prevailing justification of CSR with the taxonomy of the approaches in CSR methods that are instrumental and descriptive and strategic for the companies. The two research questions that can be highlighted are –
- How are the strategic, instrumental and descriptive approaches to CSR benefits are available for the companies and what methods are they using?
- How CSR methods and achieving them are different for different companies and what are the changes that have occurred from the past for their achievement.
- Similarities and Differences between the two articles.
The major similarity between the two articles are both are highlighting the needs of CSR and how companies are incorporating the same in their accounting disclosures. Both highlighting the needs of CSR and how companies can take benefit from that and how are shareholders getting the same. It also highlights the needs for good CSR benefits to flow off to the non-shareholders who are dependent on the company in some way or the other. Both the articles are very well written and presented and thus they have been selected (Mubako & O’Donnell, 2018).
Reasons for article selection
The major difference between the two articles are that one article is highlighting the needs of CSR disclosure, how the method of disclosing the same has changed from 1970s, and why it is important part of corporate accounting now. The other article is highlighting the methods by which companies can attain the CSR benefits, whether the benefits that they get they are getting are directly connected to the CSR efforts that they have put in. It also analyses that different companies follow different theories and studies to achieve their CSR objectives and then state the same in their annual report (Bumgarner & Vasarhelyi, 2018).
- Major Implications of the Research Studies.
There are many stakeholders that are dependent on the companies in some way or the other. The companies are accountable to them for all their activities and needs to show the same in their annual report. In case of CSR activities, it aims to make the companies accountable for their activities socially, so that they can carter to the needs of the various stakeholders and balance them accordingly (Garon, 2018). And because of this they also need to show the same in their annual reports and give proper disclosures so that people have correct knowledge and can draw their opinion accordingly. Two major implications for three stakeholders are given below-
- Accountants in Australian Companies.
The first article highlights the need CSR disclosure in the annual reporting and highlights how important it is for corporate accounting part (Kangarluie & Aalizadeh, 2017). Thus, accountants can understand what are the disclosure they need to give and they need to analyse
The second article highlights how companies are using different methods for achieving the CSR objective which are strategic, instrumental and descriptive and thus accountants will also understand what are the methods they can apply for the companies they are working for.
- Accounting Regulators.
The second article is highlighting the methods that various companies uses and is relating the accounting benefits with the accounting methods. Thus, regulators can check whether companies are following the methods and the benefits are related to these methods for the companies (Mock, et al., 2018).
The first article is highlighting how the disclosing policies have changed over the years since 1970s and thus would also be beneficial for the accounts regulators. They would know whether the companies are making proper disclosing and whether stakeholders are getting benefit from that. They can also analyse the annual reports of the company in a better way.
- External Users of the Financial Statements i.e., the public
The company needs to be applicable to the society in which the company works. Thus, these articles are very much helpful for the public.
The first article helps in highlighting whether company is making proper disclosures or not and thus public can see and analyse the disclosures that has been done and then judge whether the company has followed proper corporate accounting policies. It also helps them in understanding that corporate accounting is correct or not (Lessambo, 2018).
The second article is highlighting the steps that the company is taking in achieving those corporate objectives and hence public can judge whether the companies are correct in their method and are fair and taking care of all the stakeholders of the company (Andiola, et al., 2018).
Conclusion
Based on the overall analysis it can be said that the companies need to achieve their CSR needs and objectives and it is important that the investors are aware whatever the company is doing and whether they are taking care of the needs of all the shareholders. The two articles bring out the relevant changes that have occurred since past many years in the CSR policy disclosures and it is important that companies should incorporate all such amendments in their disclosure policies. CSR policies helps the companies in becoming responsible towards the companies they are working for and towards the people who are working for them. Both the articles are very well written and presented and highlights the need for good CSR policies clearly.
References
Andiola, L., Lambert, T. & Lynch, E., 2018. Sprandel, Inc.: Electronic Workpapers, Audit Documentation, and Closing Review Notes in the Audit of Accounts Receivable. Issues in Accounting Education, 33(2), pp. 43-55.
Bumgarner, N. & Vasarhelyi, M., 2018. Continuous auditing—a new view.. Continuous Auditing: Theory and Application, 20(1), pp. 7-51.
Charles H, C., Giovanna, M., Dennis M, P. & Robin W, R., 2015. CSR disclosure: the more things change…?. Accounting, Auditing & Accountability Journal, 28(1), pp. 14-35.
Garon, J., 2018. Ownership of University Intellectual Property. Cardozo Arts & Ent. LJ, 36(1), p. 635.
Giacomo, B., Kamalesh, K. & Giovanna, M., 2013. Descriptive, instrumental and strategic approaches to corporate social responsibility. Accounting, Auditing & Accountability Journal, 26(3), pp. 399-422.
Kangarluie, S. & Aalizadeh, A., 2017. ‘The expectation gap in auditing. Accounting, 3(1), pp. 19-22.
Lessambo, F., 2018. Audit Risks: Identification and Procedures. Auditing, Assurance Services, and Forensics, 3(1), pp. 183-202.
Mock, T. J., Ragothaman, S. C. & Srivastava, R. P., 2018. Using Evidential Reasoning Technology to Enhance the Audit Quality Assurance Inspection Process. Journal of Emerging Technologies in Accounting, 15(1), pp. 29-43.
Mubako, G. & O’Donnell, E., 2018. Effect of fraud risk assessments on auditor skepticism: Unintended consequences on evidence evaluation. International Journal of Auditing, 22(1), pp. 55-64.
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