A Review of Third Sector Reporting Frameworks: Communicating Value Created in Small and Micro Social Enterprises

A Review of Third Sector Reporting Frameworks: Communicating Value Created in Small and Micro Social Enterprises

Belinda Luke (Queensland University of Technology, Australia)
DOI: 10.4018/978-1-5225-6298-6.ch002

Abstract

The need for social reporting in third sector organizations is widely acknowledged. However, there is little agreement on how best to approach this. While various social reporting frameworks are available, the resource constraints (primarily time and money) of third sector organizations such as social enterprises, many of which are small or micro enterprises, are often overlooked in the development of these frameworks. Accordingly, the purpose of this chapter is to review the appropriateness of available social reporting frameworks, in view of social enterprises' hybrid nature and often limited resources. Borrowing from the discipline of accounting, fundamental financial reporting concepts and principles are considered, underscoring the need for a general-purpose reporting framework appropriate for social enterprises' dual objectives, limited resources, and their diverse range of stakeholders.
Chapter Preview
Top

Methodology

As a conceptual study, this research began by examining both academic and grey or professional literature relating to social reporting frameworks. This process involved reviewing social reporting approaches promoted and adopted in practice (e.g. Global Reporting Initiative, Social Return On Investment), examination of social reporting regulation in various countries, as well as searching academic databases for literature on social reporting frameworks examined and/or promoted in theory and/or practice.

Developments in the area of social reporting also highlighted the increasing involvement of professional accounting bodies, resulting in a review of publications (exposure drafts, accounting standards, and discussion papers) from these organisations (e.g. International Public Sector Accounting Standards Board, Australian Accounting Standards Board, New Zealand Accounting Standards Board), as well as responses to these developments by industry (e.g. chartered accounting firms).

Comparison of the various frameworks revealed a number of themes, as well as similarities and differences regarding the underlying philosophies of these frameworks (e.g. comprehensive approaches, financialisation approaches, summary or partial accounts). These themes and approaches were compared with social reporting practice (with particular consideration given to legitimacy implications), and financial reporting principles, to develop a social reporting framework. The framework developed for social enterprises (many of which are small or micro) considered the typically limited resources of these organisations, the perceived limitations identified in both theory and practice with respect to the narrow consideration of social enterprise legitimacy, and the need for information which provides a basis for informed decision-making.

Complete Chapter List

Search this Book:
Reset