Tài liệu Social accounting in vietnam a study of its importance

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SOCIAL ACCOUNTING IN VIETNAM: A STUDY OF ITS IMPORTANT By VU THI MAI Student ID: E0700304 Graduaration Project Submiited to the Department of Business Studies, HELP University College, in Partial Fulfilment of the Requirements for the Degree of Bachelor of Business ( Accounting) Hons. OCTOBER 2011 DECLARATION OF ORIGINALITY AND WORD COUNT I hereby declare that the graduation project is based on my original work except for quotations and citations which have been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other course/degree at Help University College or other institutions. The word count is 11136 words. Vu Thi Mai October 2011 2 ACKNOWLEDGEMENT The project would not be done properly without the assistance, support and encouragement of many people. I wish to take this opportunity to thank all the people who have helped me during the time of completing this project. I would like to express my deep gratitude to my supervisor Dr Phan Thu Huong, Vietnam National University Hanoi. She has kindly helped me and supported me all the way through. I also would like to express my thank to Ms. Sumathi and Ms. Shenba, Help University College, who initiated the project and give so much instruction and support. Additionally, I also would like to extend my special thanks to managers, investors, my friends, and other people who have help me to carry out the survey. I want to thank them for all their support, interest and valuable hints. 3 Social accounting in Vietnam: A study of its importance By VU THI MAI October 2011 Supervisor: Dr PHAN THU HUONG ABSTRACT Over recent years, the role of business organizations within society has received increasing attention, and the expectations towards these organizations have increased accordingly. The term that has been coined for these expectations is corporate social responsibility (CSR) or social accounting (SA) (Schouten and Remme 2006). Nowadays, it is generally recognized that SA is of strategic importance to ensure long-term business competitiveness and success. Its potential is enormous in the areas of employee performance, cooperation among other stakeholders (business partners, investors, consumers, suppliers) and an engine of economic growth (Lamy 2002). So, the stakeholders‘ views on SA performance of business are enormous, and the key responsibility in this performance goes to the managers, consumers, investors. This paper examines the perception of manager, consumer and investor on SA performance of corporations in Viet Nam. The results of the study suggest that there is strong support for SA from managers and a growing awareness among consumers and investors. Nevertheless, the difference between the way people understand and their action caused they are not eager to support for SA 4 issues such as lack of SA system from firm, some relevant barriers (living expenses, low CSR communication tools). However, with highly positive attitude toward SA and the willingness to learn about SA of people, SA concept and practice will be popular and developed further in the future. 5 CONTENTS DECLARATION OF ORIGINALITY AND WORD COUNT....................................1 ACKNOWLEDGEMENT ............................................................................................3 ABSTRACT ..................................................................................................................4 CONTENTS ..................................................................................................................6 LIST OF FIGURES ......................................................................................................8 CHAPTER 1: INTRODUCTION .................................................................................9 1.1. Overview ..........................................................................................................10 1.2 The reason for conduct this research .................................................................12 1.3 Scope .................................................................................................................12 1.4 Structure of theory .............................................................................................13 CHAPTER 2: LITERATURE REVIEW ....................................................................14 2.1 Conceptualization of Social Accounting ...........................................................15 2.1.1 Social accounting thesis .................................................................................18 2.1.2 Sustainability accounting ...............................................................................19 2.2 Legitimacy theory..............................................................................................20 2.3 Social Reporting ................................................................................................20 2.4 Assumption of the theory ..................................................................................22 2.4.1 Manager‘s behavior on SA conceptualization ................................................22 2.4.2 Consumer‘s attitude on SA conceptualization ...............................................24 2.4.3 Investor‘s perception on SA conceptualization ..............................................25 CHAPTER 3: RESEARCH METHODOLOGY ........................................................27 3.1 Research objective and scope ............................................................................28 3.2 Sampling ............................................................................................................28 3.2.1 Sample population ..........................................................................................28 3.2.2 Sample frame ..................................................................................................28 3.3.3 Sample size .....................................................................................................28 3.3.4 Sample techniques ..........................................................................................29 6 3.3 Questionnaire.....................................................................................................29 3.4 Data collection ...................................................................................................29 3.4.1 Secondary data ...............................................................................................29 3.4.2 Primary data ...................................................................................................30 CHATER 4: ANALYSIS ............................................................................................31 4.1 Overview of results ...........................................................................................32 4.2 Result analysis ...................................................................................................36 4.2.1 Management survey .......................................................................................36 4.2.1.1. Result of manager‘s questionnaire survey..................................................36 4.2.1.2 Discussion ...................................................................................................39 4.2.2 Consumers survey ..........................................................................................40 4.2.3 Investor survey ...............................................................................................44 4.2.3.1 Result of questionnaire survey ....................................................................44 4.2.3.2 Discussion ...................................................................................................46 CHAPTER 5: CONCLUSION ....................................................................................48 5.1 Conclusion .........................................................................................................49 5.1.1 Management survey .......................................................................................49 5.1.2 Consumer survey ............................................................................................50 5.1.3 Investor survey ...............................................................................................51 5.2 Limitation of study ............................................................................................53 5.3 Recommendations .............................................................................................53 REFERENCE ..............................................................................................................54 APPENDIX: QUESTIONNAIRE ...............................................................................58 CONSUMER SURVEY .............................................................................................60 INVESTOR SURVEY ................................................................................................62 7 LIST OF FIGURES Figure 1: Branches of social accounting .................................................................... 17 Figure 4.1. Response rate ........................................................................................... 33 Figure 4.2. Distribution of manager‘s response from questionnaire survey .............. 36 Figure 4.3. Representation of consumer‘s responses from questionnaire survey ...... 40 Figure 4.4. Distribution of investor‘s responses from questionnaire survey ............. 44 8 CHAPTER 1: INTRODUCTION 1.1 Overview 1.2 The reason for conduct this research 1.3 Scope 1.4 Structure of the study 9 1.1. Overview ―Social accounting is best understood as a reaction against conventional accounting principles and practices. It posits other goals as well as, or instead of, financial profitability. Moreover, social accounting attempts to embrace not only economic and monetary variables but also – as its name suggests – social ones, including some which may not be amenable to quantification in monetary terms.‖ (Geddes, 1992) In 1970s, there were a number of activities in the new accounting domain. Because corporations often cause negative effects on the environment, health and safety of employees, customers and nearby neighborhoods, as well as communities, the corporations and accounting firms experimented with reporting formats and included sections in their annual reports on social performance. Social accounting is a way of representing how an organization is meeting its social or ethical goals. Social accounting may be classified and recorded business activities regarding social responsibility. It may be considered as an approach toward constructing accountability. The vital activities of social accountability include enhancing corporate governance, increasing the development effectiveness, and empowerment. Social responsibility is key word of this concept which includes perception of businesses with environment and their treatments for employees also. Social responsibility concept is also an important concept of management. It is the duty of enterprise to do some social activities for completing their social responsibility. Therefore, social accounting is a very important measure of the company‘s performance. Company has to make social responsibility income statement and balance sheet. But it is not compulsory to make these statements. Moreover, businesses have some obligations to the society, as they created some problems in their revenue and these problems need addressing properly. So, 10 stakeholders expect organizations to be engaged in some social issues such as offering reasonable price and quality living of consumer and employee, fair wage, employee safety, fair advertisement, proper fund management, etc. ―Business organizations can contribute to sustainable development by managing their operations in such a way as to enhance economic growth, increase competitiveness and ensuring at the same time environmental protection and promoting social rights. Thus social accounting is a concept whereby companies integrate social and environmental concerns on their business activities‖ (Julie 2002). In Vietnam, some Vietnamese citizen and enterprise do not know the concept of social accounting although it is quite popular. In additions, we have only twenty six (26) Vietnamese Accounting Standards relating to the guidance for financial accounting. We have no any Vietnamese accounting standard or any documentary to guide social accounting application; whereas most multinational companies use social accounting system and reports at the same time with financial accounting system and reports. However, in recent year, Vietnamese citizen as well as business managers‘ attitude and awareness toward social accounting has been changed in the positive way, since Vietnamese government has taken some significant steps like that CSR forum establishment, CSR award annually, CSR short-term courses to tailor businesses acting in sociality‘s perspective. Vietnamese Government commit that both of Vietnamese firms and international firms operating in Vietnam have to follow these strictly. Moreover, Vietnam‘s authority issued some of SA awards to improve business corporations‘ responsibilities toward society. However, there are some problems and challenges in developing concept of social accounting in Viet. SA is only familiar with managers and accountants, and the other stakeholders still have limited 11 understandings. Long- term plan and strategy to conduct the programs of SA in practice are not identified by concerned people. On the contrary, the companies are in shortage of management ability and professional knowledge in SA practices. Now, Vietnam government and Vietnamese relevant parties need raise the SA knowledge and perception, as well as suggest some possible solutions for happened SA dilemma that contribute to strategies for sustainable development. 1.2 The reason for conduct this research After, Vietnam has joined World Trade Organization (WTO), Vietnamese economy had developed rapidly, and globally. As consequently, it requires Vietnam need to pursue strategies for sustainable developments. Social responsibility of business has been practiced by most of the business organizations in those countries and also in their partners. But in case of Viet Nam business organizations, the experience of social responsibility resulted from application is not enough. Manager‘s vision, consumer‘s perceptions, as well as investor‘s on SA performance have been considered important in this situation. Thus, the paper aims to investigate the following issues: to understand contemporary SA views established in global perspective; to examine the attitude of manager, consumer, investor of the industries on SA contemporary issues. 1.3 Scope The study is examining the managers‘ attitude on social accounting performances in both public and private sector enterprises in Viet Nam. The industries selected are banking, consumer manufacturing goods, and construction. The scope of the study was limited to participants of the industries of Ha Noi City, Ho Chi Minh City which 12 are two top of the biggest city of the country. The study concentrated on the industries where there are a number of large well-established enterprises for data availability. 1.4 Structure of theory The theory involves five chapters. Each chapter does independent and discussing about social accounting. First chapter introduces overview definition of social accounting, the reason of conducting this theory, scope and structure of theory. Second chapter explains more detail about conceptualization of social accounting, as well as well-done thesis relating this issue, discussing in social reporting. Besides that, the main part of this chapter is to provide assumption of survey participant‘s perception toward SA. Third chapter shows how the theory collects data, information, and theory‘s participant, as well as sampling, questionnaire. Next chapter provides result‘s analysis basing on participants‘ choices in collected survey. From this analysis, we can give conclusion for these assumptions in chapter two. Last chapter provides general conclusion for this theory, limitation and recommendation 13 CHAPTER 2: LITERATURE REVIEW 2.1 Conceptualization of Social Accounting 2.1.1 Social accounting thesis 2.1.2 Sustainability accounting 2.2 Legitimacy theory 2.3 Social Reporting 2.4 Assumption of the study 2.4.1 Manager’s behavior on SA conceptualization 2.4.2 Consumer’s attitude on SA conceptualization 2.4.3 Investor’s perception on SA conceptualization 14 2.1 Conceptualization of Social Accounting Accountability represents the direct of the social system and its objective is to conceive this system to measure, analyze, form and control it. It is not easy to approach the social reality without correlating it to the financial, economic and administrative reality because of clear-cut connection between the two. The social accounting purposes at balancing the society and the accountability practice as the former appears as a branch of the accountability within the context of scientific knowledge which offers answers to social problems, to their causes, projections within a dynamic environment. Over a decade, the economic, political and social environment has gone through profound changes which result a higher level of globalization and a harsher rivalry. The business organizations have become stronger and stronger and one the issue of taking responsibility was posted they have started to attach more and more importance to the corporate social responsibility. Consumer‘ expectations in term of quality product or services and environment protection, social responsibility or ethical values are promoted by the companies. The result of the stakeholders‘ pressures to encourage the large corporations to behave ethically and socially constructively was the concept of the social accountability emerged in Great Britain in the 70‘s. Mobley (1970) defined that: ―social accounting refers to the ordering, measuring and analysis of the social and economic consequences of governmental and entrepreneurial behavior. So defined, social accounting is seen as encompassing and extending present accounting.‖ In recent times, medium and large, private or public firms voluntarily started to show interest in establishing their social. As the result, SA is expanded in a larger scale. Quarter, Mook and Richmond( 2003 ) defined social accounting as ― a systematic 15 analysis of the effect of an organization on its communities of interest or stakeholder, with stakeholder input as part of the data that are analyze for the accounting statement‖. The number of social and environmental questions has been increased rapidly in the community. These are considered as the whistle blowing for companies to be more socially responsible and to manage their environmental impact in a better way (Wilmshurst and Frost, 2000), and to change the companies‘ ideas of benefit over cost. In response, many companies have developed environmental management and accounting systems and have increased their social and environmental disclosure practices (Larrinaga et al., 2001; Gray et al., 1995a; Guthrie and Parker, 1989). The ultimate purpose of social accounting is producing accountability of the social, environmental and economic effects of an organization‘s actions and therefore improving the social impact (Quarter, Mook and Richmond 2003). In other word, sight of the primary purpose of social accounting seems as a means for community, organizations and enterprises to track for them how they are going. The traditional accounting is only concerned actions and transactions within the organization itself. As a result, organizations take significant activities to record while other nonmaterial activities are seemed as irrelevant and ignored. However, the traditional accounting needs to change and a consequence of these new requirements. Each and every these new information helps us identify other branches of social accounting. They are environmental accounting, human resources accounting, ethical accounting. In which, the environmental accounting targets to quantify all natural capital resources destroyed or compromised in the production process or to assess the way good and services are utilized. Human resources accounting must be includes in the financial reports due to their value, at an internal level or a management level in 16 making decisions by potential users such as in making management decisions regarding personnel. Ethical accounting refers to ethical information, to the organization‘s ethical values, and comprises data regarding behavior in terms of consumer and community protection, monetary or service sponsorships granted to sports centers or non-profit organizations, policies and public relations. Environmental Accounting Social Accounting Human Resource Accounting Ethical Accounting Figure 1: Branches of social accounting Furthermore, there are some benefits of social accounting. It will provide business organizations with an ongoing record of how these organizations or enterprises has developed and changed over time. Secondly, they will get feedback on how things are going from the range of people involved in these organizations or enterprises. Third, firm‘s managers can be able to identify which areas are well managed and not so — and they can use this information to improve what they are doing well and make adjustments to change what are not. They also will know how well they are achieving their aims and values. Lastly, firm‘s managers will have a record of what their organization or enterprise is doing and the sorts of impacts it is having — information they can use when applying for grants and funding, for reporting on grants, and for promoting what they do. 17 SA is perhaps most developed in the UK, where initiatives such as the Social Audit Network provide training and support in social accounting (www.socialauditnetwork.org.uk). It is based on three overall steps including scoping: ―identifying key elements of your organization or enterprise, accounting – deciding on the scope and setting up the social accounting system, reporting and auditing – reporting back to your stakeholders and responding to the findings‖ (Pearce et al 2005). 2.1.1 Social accounting thesis In 2002, Gray presents a critical analysis of the literature published in social accounting over the last twenty-five years, with a particular focus on publications in the Accounting, Organization and Society Journal (AOS). He presents an historical retrospective of this subject, reflects on the dimensions of social accounting and identifies the most important publications in this area. Medawar (1976) claims that it is very important to the social environmental accounting area. Gray (2002) said that ―it is written from (and about) the agony, frustration, success and essential necessity of one of the deepest and most influential processes of engagement in the history of social accounting. It is informed, neither by any love for capitalism nor by any subscription to terrorism or revolution but by a deep rooted sense of justice, decently, need for change, personal commitment and reasonableness outraged by unreasonableness‖. The social accounting project has been broadly described as the universe of all possible accountings (Evans and Zadek, 1997); it seeks engagement with the desire to change current accounting practice to include a broader set of users, new technologies, and events not usually included in mainstream accounting practice 18 (Dillard, 2007). The motivation for change is predicated on the ―refusal to accept that we live in the best of all possible worlds‖ (Gray, 2002). 2.1.2 Sustainability accounting Social accounting consists of a number of sub-sets, one of which is sustainability accounting (Bebbington, 1999), and can be further considered under several broad approaches (Bebbington and Gray, 2001). First, sustainability accounting should not exist (at least in its current forms) simply because the process of accounting for sustainability is likely to be socially and environmentally damaging (for example, Maunders and Burritt, 1991). The second approach suggests sustainability can be better ‗managed‘ with the use of sustainability tools that could be adopted to increase the return on financial capital. Last, sustainability accounting may exist to highlight organizational practices and to provide a catalyst for change initiated within (for example, Bebbington, 2007b) or outside the organizational boundary (for example, O‘Dwyer, 2004a). Sustainability accounting, according to Bebbington (2007b), is based on the premise that a sustainable society requires those making decisions to be informed about the impact of their actions and of those around them, in particular those controlling vast resources, as in large organizations. Bebbington‘s (2007b) internally focused description does not exclude the possibility for influencing policy or various stakeholders, but does infer that such catalysts for change congregate within the organisational boundary. 19 2.2 Legitimacy theory Suchman (1995) defined that ―Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions‖. Legitimacy theory has been cited most frequently in the social and environmental accounting area (Islam & Deegan, 2008; Deegan et al., 2002). Legitimacy theory provides the explanation and guideline of voluntary social and environmental disclosures made by corporations. Legitimacy theory is about disclosing information in the annual reports of the firm (Gray et al. 1995a). Legitimacy theory is divided into two major categories. The macro-theory of legitimation is known as Institutional Legitimacy Theory that deals with how organizational structures as a whole (such as capitalism, government) have gained acceptance from society at large. The second layer is called the ―Organizational Level‖ (sometimes referred to as Strategic Legitimacy Theory) which is a process, legitimation, by which an organization seeks approval (or avoidance of sanction) from groups in society. 2.3 Social Reporting Social reporting can be analyzed with different purposes: to understand the disclosure of a specific country; to analyze the disclosure practices pertaining to a particular category of information; to analyze some of the specific aspects connected with environmental or social matters such as liabilities, as well as trying to validate some theory and comparing disclosures practices from different countries and others. Reporting or disclosure is the end result, but the initial part would be getting corporations involved in social activities, social concerns and social responsibilities. 20
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