Financial Management of Sick Units

8/3/2019 Financial Management of Sick Units

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MODULE -5

FINANCIAL MANAGEMENT

OF SICK UNITS

ECONOMIC VALUE ADDED

SOCIAL ACCOUNTING

CORPORATE GOVERNANCE



SOCIAL ACCOUNTING



INTRODUCTION Business is a socio-economic activity and its draws its inputs from the

society, hence its objective should be the welfare of the society.

It should owe a responsibility towards solving many of the social

problem.

In the present age growing technological,economic,culutral and socialawarness,the accounting has not only to fulfill its stew-warship of the

owners of the enterprises, but also accomplish its social function.

Changing environment and social parameters have compelled business

enterprise to account and report information with regards to discharge

of their social responsibilities.



CONCEPT The concept of social accounting has gained importance as result of

high level industrialization which has brought prosperity as well as

many problems to the society.

It is necessitated the corporate sector, with huge amounts of funds at

their disposal, to invest substantial amounts in social activities so as to

nullify the diverse effects of industrialization.

Social accounting is concerned with the study and analysis of

accounting practice of those activities of an organization,

It is also know as social Responsibility Accounting,socio-Economic

Accounting ,social Reporting and social Audit, aims to measure andinform the general public about the social welfare activities undertaken

by the enterprise and their effects on the society.



Define The National Associations of Accountants (NAA)

Committee defined social accounting as

³the identification,measurement,monitoring and reporting of the social

and economic effects of an institutions on society .´

It is concerned with the internal and external reporting of social costsand benefits both in quantitative as well as qualitative terms by a

business enterprise.



Obj ectives To identify and measure the net contribution of an individual firm

towards the society.

To determine whether an individual firm¶s strategies and practices are

consistent with widely shared social priorities.

To make available relevant information about firm µs goals, policies programmed and performance towards use and contribution to scarce

resources and social resources allocation.

To develop models of quantification and proper presentation of social

costs and benefit of an enterprise.

To meet information needs of consumers and society.



Major area of social performances or scope of

social audit The term social audit has in the past been mostly linked with social

accounting.

Social audit is an objective assessment of a business enterprise as to

how it has been able to discharge its obligations in the course of

operations.

Social audit includes everything that is concerned with the

development and growth of the society at large.

The activities includes problems like energy

conservation,safety,illeteracy control of population, consumer

protection ,environment control, employment of minorities ,family planning and welfare programmed etc.



Canadian National Association of Accountants has

identified four major components of social

performance Or scope of social audit Community involvement

It includes community services and communityinvolvement by employees.

Human Resources stewardship

It covers activities related to the well being of employeesincluding job enrichment and promotional policies.

Physical resources and environmental stewardship

It includes conversation of resources and protectingenvironment ,air and water ,quality control and appropriate disposal of waste.

Product or services contribution

It deals with the impact of a company¶s products or services on the society ,advertising ,packing. Safety and warranty

policies.

Documents

Financial Management of Sick Units