Date of Award


Document Type


Degree Name

Doctor of Philosophy (PhD)




After an impr ssive discussion of the problems relating to the accounting and reporting aspects of corporate social acti­ vities, the 1972 Comnittee on Environmental Effects of Organization Behavior of the American Accounting Association recommended that the accountants should not attempt to measure and report the total social costs of damage to the environment resulting from organi­ zational behavior. The Committee cited several reasons to support the above reconmendation. The major proposal of this study runs counter to the Comnittee's recormr ndation. It proposes that immediate attention from the accounting profession is necessary to account for and report on the social activities of the corporate enterprise in its traditional reporting model. This proposal is based on the con­ clusion of the primary objective of this study that (1) corporate resources conmitted to social activities can be measured in mone­ tary terms based on the input cost methodology proposed in this study; (2) the resulting costs of these social programs can be accounted for and reported on based on existing generally accepted accounting principles; (3) the cost allocation problem between the regular operation of the c001pany and undertaking these social acti­ vities is not new for the accountants. However, experimentation is needed to arrive at the most reasonable cost allocation methodology to insure the reliability of the accounting figures; and (4) the attest function of the accountant is not jeopardized or rendered unnecessarily difficult. However, the accountant has to rely, to a greater extent, on the opinions of experts from other discip­ lines. Of course, this reliance is not new in the accounting profession. Actuarial considerations in pension plans are accepted by the accountant with heavy relianc,i on the opinion of the inde­ pendent actuaries. The opinion of the legal counsel as to the status and/or existence of contingent liabilities is likewise relied upon by the accountants. For internal reporting, the study concludes that both quantitative and qualitative data m8y be provided for internal decision makers. However, the requirements for qualitative data may not be critical at this point. Companies which responded to the pervasive social problems are more concerned with how much in dollar tenns, and from an input cost standpoint, such social respon­ siveness is costing the company. The study also concludes that given the state of the art, the concept of social auditing may not be operational in the fore­ seeable future. Nevertheless, if such concept is rendered opera­ tional the social audit report might be considered as a special report to supplement the traditional financial statement models of the accountant. Consequently, the primary media for reporting the social activities of the corporation are still the traditional reporting models of the accounting profession.

As secondary objectives of the study, the concept of corporate social responsibility and the related issues of the quality of life have been discussed. Likewise, the economic aspects of the concept was explored. As a result, an operational definition of corporate social responsibility as well as a definition of the quality of life has been formulated. Social and economic rationale for corporate social responsibility has been outlined for both the corporation and its managers.

Finally, the social responsibility of the accounting profession has been discussed. A definition of the accountant's social responsibility has been offered, and a social profile for both the accountant and the accounting profession has been formu­lated. To make the accounting profession responsive to the needs of society, a foundation for a contemporary accounting theory has been presented