Reference no: EM13519983

Benston (1982, p. 102), in an analysis of corporate social accounting and reporting (CSAR), says: "The social responsibility of accountants can be expressed by their forebearing from social responsibility accounting." However, in a critique of Benston's analysis, Schreuder and Ramanathan (1984, p. 414) state:

The comments . . . do not purport to convey the message that there is no value at all in analyzing the potential of CSAR from a shareholder perspective and proceeding from the (implicit) assumption of perfect and complete markets. We do, however, wish to point out that this may not be the most appropriate perspective as (1) CSAR is addressed toward a more inclusive group of stakeholders and (2) one of its main objectives is to include in the accounting system those aspects of corporate behavior that are decidedly not handled well by the market. Therefore, the perspective implied in Benston's analysis is of very limited value at best.

Required:

CSAR assumes there is a legitimate interest or "stake" in the corporation beyond the stockholders' interests, and that these other stakeholders' interests are not well served by traditional financial statements. Therefore, it follows that within a broad political economy of accounting, CSAR is an important policy-making issue. Critically evaluate this proposition and indicate your agreement or disagreement and the underlying reasons for your position.