Significance Of Silent And Shadow Accounting Practices In Business

Discussion

The main purpose of this assessment is to analyze the Journal article which is related to social accounting and the article effectively researches about silent and shadow accounting. The assessment considers the current Corporate Social Responsibility (CSR) practices which are in place in current economy which are silent and shadow accounting practices (Moerman and van der Laan 2015). The assessment explains the terms of silent and shadow accounting in a business and the how the same can be used for the purpose of creating a new form of CSR practices for businesses. The analysis of the article is done with a view point of establishing that silent and social accounting practices have impact on businesses. The assessment focus to draw out conclusion relating to the application of silent and shadow accounting practices in the business. The application of CSR in a business has already gained significant importance in society and it is a mandatory to significantly follow CSR practices for every corporation.

The journal paper which is considered is on emerging social accounting practices which are available to businesses. In today’s world condition, the role of CSR in a business has become a crucial part of the business and also its reporting process. There have been several criticisms made for social audit due to managerialism (Dreher, Méon and Schneider 2014). As per Rob Gray, the disclosures in relation to the business can be provided from various range of channels out of which the use of financial statements and directors reports are the most used channels. The information which gray points out is that the disclosures also contains social and environmental data. The purpose which can be identified relating to silent accounting is to identify a subset of annual reports or any source of documentations.

As per Gray, there can be aide scale scope and application of the silent accounting techniques in corporations (Tregidga 2017). The researchers provide an example of a pharmaceutical company which has large scale operations can benefit from such practices. However, the amount of information and data which are produced by business and which are to be considered by the management for the purpose of decision making process is continuously increasing. Therefore, it would be good move to increase the overall boundary of disclosures which is to be provided by businesses. The increase in the framework for disclosure also requires systematic increase in the underlying framework which is to be followed by businesses.

The article further states that there is still scope which can widen the disclosures and ensure social accounting practices in a business. In case of silent accounting practices, information is collected mostly from external sources. The shadow accounting report would not be similar to silent accounting report and would aim to widen the scope of reporting. The shadow accounting practices would be including the opinions and viewpoints of the stakeholders of the business. These approaches if adopted by businesses have its range of benefits as the primary focus would be on the needs of the stakeholders (McDonald-Kerr 2017). The drive towards an effective social accounting practices can be traced in companies which are operating in UK for the purpose of bringing about improvement in the reporting framework of such companies.

The significance of silent and shadow accounting approaches is clear as the reporting framework can be improved in terms of social disclosures. As per the opinion of Gray, both the practices can give significant insights about the social reality of a business. The author also points out that such practices would throw light on social performance of any business and also effectively provide an appropriate view point of the stakeholders of the business (Boyce 2014). The practices can lead to a better management system in the business and also help in the decision-making process of a business. An example can be given of the companies which are operating in UK which have recently implemented social standards. The implementation would bring about improvement in reporting but also help in meeting the environmental needs and disclosures of a business. The social and silent accounting framework is very useful for the stakeholders and also fund managers for the purpose of assessing the ethical and environmental aspects of a business which is operating in UK.

The aspect of Shadow accounting was first introduced in 1970s and the application for the same have increased significantly during recent times. The practices has the capability of bringing about accountability in the reporting process. The journal paper which is analyzed also points out the steps which are to be taken by the management of a business for the purpose of constructing such a framework in the business (Gray, Brennan and Malpas 2014).  The journal article specifies the tole good social accounting practice on social performance of the business. Such types of accounting practices by an organization is known as external social audit. As per many authors, external social audits are conducted follow the motivation that they provide a balancing view over their own view about the considerable resources which are present at the disposal of companies. The practices of shadow accounting had been adopted by numerous UK based companies for experimental purposes and such companies belong to different industries which did have appropriate reporting framework for environmental and social concerns (Gray, Adams and Owen 2017). The information which are presented to the users and the stakeholders are with much edits and analysis and are only pure information collected in respect of the business.

The work which is undertaken by such researchers is to point out the significance of such practices on a business and its environment. The corporate counter information can nowadays also be collected from internet which has further contributed to the cause (Plantin 2014). The movements were undertaken so as to bring about a global awareness for different environmental and social issues and in addition to this hold the organization more accountable for all activities undertaken by it. The factors which contributed to such awareness in businesses are globalization, emergence of internet technology and the development of different networks which has effectively created the need for counter information as per the demands of the public. There are also certain websites which are non-corporate in nature but provide wide range of information to the public (Dillard and Brown 2015). This has further allowed the promotion of accountability of corporations relating to their social and environmental activities.

The research journals which are considered all follow an experimental and deductive approach for the purpose of research work. The work of different authors is based on the success which is achieved by different UK based corporations and research shows the development in silent and shadow accounting techniques and also the need for the same in different businesses. The advantages of the research techniques which is undertaken is that the results would be justified on the basis of the experiments which are undertaken by businesses (Chesney, Gold and Trautrims 2017). The analysis of the journal article shows that the silent and shadow accounting practices in a business is required for the purpose of enhancing the accountability and transparency of reporting framework which is followed by different organization. The concern on environmental and social accounting practices have increased significantly with the overall increase in the activities and the information which is generated by businesses.

The silent and shadow accounting practices in a business has resulted in bringing about more efficiency in disclosures and reporting of financial information of the business. The accounting practices of the business can bring about changes in accountability practices in the business. Increase in the information which is generated by the business and also increase in the operations of the business, has resulted in the need of efficient reporting framework for business. Therefore, it is imperative that organization meet the reporting requirements for environmental and social concerns of a business (Lee and Cassell 2017). Silent and Shadow Accounting practices in a business allows the management to effectively deal with reporting of businesses practices.

Conclusion

The above discussion shows that the impact of silent and shadow accounting is very important in today’s world. The social and environmental reporting aspects meet the requirements of the business. The above discussion also shows analysis of different companies which are operating in UK and the reporting framework which is followed by such companies. The reporting framework of a business can improve the accountability and transparency in a business. The analysis. The research paper confirms that there are significant benefits which are associated with silent and shadow accounting practices in a business.

Reference

Boyce, G., 2014. Professionalism, the public interest, and social accounting. In Accounting for the public interest (pp. 115-139). Springer, Dordrecht.

Chesney, T., Gold, S. and Trautrims, A., 2017. Agent based modelling as a decision support system for shadow accounting. Decision Support Systems, 95, pp.110-116.

Dillard, J. and Brown, J., 2015. Broadening out and opening up: an agonistic attitude toward progressive social accounting. Sustainability Accounting, Management and Policy Journal, 6(2), pp.243-266.

Dreher, A., Méon, P.G. and Schneider, F., 2014. The devil is in the shadow. Do institutions affect income and productivity or only official income and official productivity?. Public Choice, 158(1-2), pp.121-141.

Gray, R., Adams, C. and Owen, D., 2017. Social and environmental accounting. Vol. I (Los Angeles, London, New Delhi, Singapore, Washington, 41-56: Sage, 210).

Gray, R., Brennan, A. and Malpas, J., 2014, December. New accounts: Towards a reframing of social accounting. In Accounting Forum (Vol. 38, No. 4, pp. 258-273). Elsevier.

Lee, B. and Cassell, C., 2017. Facilitative reforms, democratic accountability, social accounting and learning representative initiatives. Critical Perspectives on Accounting, 46, pp.24-37.

McDonald-Kerr, L., 2017. Water, water, everywhere: Using silent accounting to examine accountability for a desalination project. Sustainability Accounting, Management and Policy Journal, 8(1), pp.43-76.

Moerman, L. and van der Laan, S., 2015. Exploring shadow accountability: The case of James Hardie and Asbestos. Social and Environmental Accountability Journal, 35(1), pp.32-48.

Plantin, G., 2014. Shadow banking and bank capital regulation. The Review of Financial Studies, 28(1), pp.146-175.

Tregidga, H., 2017. “Speaking truth to power”: analysing shadow reporting as a form of shadow accounting. Accounting, Auditing & Accountability Journal, 30(3), pp.510-533.