Accounting: the expanded

Question One: The EVAS in the Accounting Context

Q1. What are the contributions and limits of traditional accounting, critical accounting and social accounting to the development of an accounting model that integrates economic, social and environmental impacts of an organization?

From the review of the accounting literature discussed in the second chapter, it is clear that traditional accounting is well entrenched, with the reformist contributions of critical and social accounting still very marginal. However, there is one reformist accounting statement, the Value Added Statement, which could be considered mainstream in some parts of the world, particularly, in the United Kingdom and parts of Europe. In developing the Expanded Value Added Statement, I have used the accepted accounting format of the Value Added Statement to provide a familiar starting point in order to bridge traditional, critical and social accounting. The Value Added Statement defines wealth in a much broader way than profit for shareholders, and uses a stakeholder approach in its reporting. This approach makes it possible to address issues underlying
social relations, a point recognized in the field of critical accounting, which argues that accounting is not neutral and plays a role in exploitation.
Another key insight from critical accounting is that accounting is socially constructed and shapes reality. However, this does not mean that it has to continue in its present form; it can also be used to strategically shape a reality that includes the values and principles of sustainability. As critical accounting does not provide much in the way of working models, we can turn to the field of social accounting and one of its subfields, which I call integrated social accounting, to find strategic accounting innovations. While the more popular type of social accounting statement (also labelled as a social or ethical audit) is supplemental to the financial accounts, integrated social accounting synthesizes within one statement economic, social and environmental factors. Two waves of integrated social accounting innovations—one in the 1970s and the other starting in the 1990s—provide many examples of how economic, social and environmental factors can synthesized within an accounting statement.