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ATOYEBI Samuel-Accounting sustainability

ATOYEBI Samuel Babajide (2013), [email protected]
(A case study of MTN LTD.)
accounting (also
as social
accounting, social
accounting, corporate social reporting, corporate social responsibility reporting, or non-financial
reporting) was originated about 20 years ago and is considered a subcategory of financial
accounting that focus on the disclosure of non-financial information about a firm's performance
to external parties such as capital holders, mainly to stakeholders, creditors and other authorities.
These represent the activities that have a direct impact on society, environment and economic
performance of an organisation. Sustainability accounting in managerial accounting contrast with
financial accounting in that managerial accounting is used for internal decision making and the
creation of new policies that will have an effect on the organisation's performance at economic,
ecological and social (known as the triple bottom line or Triple-P's; People, Planet, Profit) level.
Sustainability Accounting is a tool used by organisations to become more sustainable. The most
known widely used measurements are the Corporate Sustainability Reporting and the triple
bottom line accounting. These recognise the role of financial information and shows how
traditional accounting is extended by improving transparency and accountability by reporting on
the Triple-P's.
As a result of the triple bottom level reporting, and in order to render and guarantee consistency
in social and environmental information the GRI (Global Reporting Initiative), was established
with the goal to provide guidelines to organisations reporting on sustainability. In some countries
guidelines were developed to complement the GRI. The GRI states that "reporting on economic,
environmental and social performance by all organizations is as routine and comparable as
financial reporting".
The growing importance of sustainability triggered an increasing number of organizations to
collect, use and distribute sustainability-related data and information (Schaltegger et al., 2003).
In order to respond to this trend, the function of sustainability accounting emerged, as its role is
to provide and transmit that information, with the same purpose with which conventional
financial accounting deals with financial information and objectives (Lamberton, 2005). The
literature proposes sustainability accounting as an entirely new system of accounting, or as an
extension of traditional accounting functions, depending on who the people in charge within the
organization are and on which type of information is collected. In both cases, the starting point is
that the conventional accounting systems overlook environmental and social issues related to the
company’s activity, and are therefore are not adequate to drive decision-making in organizations
that want to proactively manage sustainability (Bennet et al., 2013).
Nevertheless, the term “sustainability accounting” has become a rather generic term, and
although attempts have been made, few definitions of sustainability accounting exist
(Schaltegger and Burrit, 2010). For the purpose of this paper, it was chosen to focus on an idea
of sustainability accounting that builds up on the concept of the “triple bottom-line” coined by
Elkington (1994). This concept is based on the perspective that a company should not just
consider its financial performance, but also the environmental and social ones, as the activity of
the firm generates impact on all three of these areas. Therefore, the concept of the triple bottomline emerged as new tool to measure organizational performance and implies that, beside
economic performance, also environmental and social performance should be measured
(Hubbard, 2009). Starting from these considerations, the following definition of sustainability
accounting was developed: “the set of activities and processes aimed at integrating social and
environmental performance into companies’ performance measurement systems, in order to
facilitate the control and the reporting of such issues”.
According to Lamberton (2005), the influence of traditional accounting principle on
sustainability accounting are widely acknowledged, as the majority of approaches to it takes
inspiration from conventional accounting principles and practices. At the same time, the author
claims that it is not proven whether applying traditional accounting principles to sustainability is
The involvement of traditional accounting into sustainability management is discussed by the
literature as well. Zvezdov et al. (2010) for instance, claim an increasing involvement of the
accounting function as well as a recognizable participation of accountants. The involvement of
accountants is often seen as valuable: Ballou et al. (2012) for example claim that using
accountants’ expertise, especially in terms of risk management, financial reporting and
independent assurance, increases the strategic integration of sustainability initiatives. Ross
(2010) adds that beside their analytical skills, management accountants can contribute with their
experience in communicating with different management functions. In order to leverage on this
potential, Medley (1997) points out that accountants should receive tailored trainings in order to
improve their understanding of sustainability issues, and promote best practices to develop their
The term cooperate special responsibility encompasses a variety of issues revolving around
companies’ interactions with society. The sorts of issues covered include ethics, governance,
social activities such as philanthropy and community involvement, product safety, equal
opportunities, human rights and environmental activities. When considering cooperate special
responsibility from the perspective of the accounting profession, such consideration is
necessarily and inextricably linked with social (and environmental) reporting or accounting.
Social accounting was itself a product, in part, of the early social responsibility movement of the
1960s (see Drucker, 1965), but also appeared around the same time the environmental movement
emerged (Gray and Guthrie, 2007). The work will focus on accounting sustainability, the effect
of corporate social responsibility.
Corporate social responsibility can be classified as those policies, activities, or behaviour
undertaken by an organisation that goes beyond the traditional economic and legal obligations
that the firm has with its target internal and external stakeholders (Howard R. Bowen 1953;
Carroll 1979; Preston and Post 1975). Studies looking at CSR have concluded that what “goes
beyond” these traditional responsibilities is influenced and, therefore, ultimately demanded by
the norms, values, and expectations of stakeholders of the organisation and are classified as
being ethical or moral obligations (Balmer et al. 2007; Carroll 1979; Sethi 1975). Responding to
these ethical obligations must be voluntary in nature and if undertaken effectively should
eventually benefit and improve the overall welfare of the community in which the firm operates
(Anderson Jr. 1989; Manne and Wallich 1972). Anderson (1989) argues that in order for these
benefits to eventuate both the organisation and its stakeholders have a responsibility to work
together. It is assumed that an organisation being proactive and meeting the needs of its
stakeholders before it is required to is deemed to be engaging in philanthropic or discretionary
type behaviour (Carroll 1979).
Despite the increasing interest around the topic of sustainability accounting and corporate social
responsibility, the majority of publications has been thus far very conceptually oriented and the
amount of empirical work is very limited (Schaltegger, Gibassier and Zvezdov, 2011). In this
sense, Taticchi (2013) argues that there is a lack of published research on the role that
performance measurement systems and reporting tools can play in order to support sustainability
projects and corporate social responsibility. The reality sees that sustainability measures are not
often integrated in strategic performance measurement systems; in addition, the factors that
explain how companies’ actual practices deal with this integration are largely unexplored (Gates
and Germain, 2010). The authors claim that such research should not only address the academic
world, but also be relevant for practitioners. Schaltegger and Burrit (2010) advocate further
research on sustainability accounting and corporate social responsibility, in particular with the
aim of understanding the dynamics linked to the development and the use of sustainability
accounting systems in corporate social responsibility, as well as of developing a comprehensive
management control approach towards sustainability that is so far missing.
The implementation of sustainability in companies deals in the first place with an external
pressure of stakeholders for the legitimation of the company. This concept is strictly related to
the role of sustainability accounting. As a matter of fact, following the criteria of sustainability
implies for firms to consider responsibilities that go beyond those related to the actors with
which they have a direct economical relations, including therefore a wider set of stakeholders
(Hubbard, 2009).
Furthermore, Epstein and Widener (2010) claim that there is a lack of guidance on the process of
identification and evaluation of stakeholders’ interests and their integration in the decisionmaking. On the other hand, it is argued that companies should integrate efficiently sustainability
in their strategy (Epstein, 2008). Consistently with this view, Epstein and Roy (2001) report how
managers are increasingly requesting support in understanding how the drivers of sustainability
performance can be identified, managed and measured, and on how systems and structures can
be created to improve sustainability performance. Starting from these considerations it appears
that the characteristics of organizational legitimacy and organizational efficiency should also be
considered when looking at sustainability accounting. This analysis is particularly interesting
because legitimacy and efficiency represent two basic value creators that are crucial for
organizations’ survival and success (Perrow, 1970; in Milne and Patten, 2002).
The study intended to assess the impact of accounting sustainability on corporate social
responsibility. Nonetheless, the relation between accounting sustainability and corporate social
responsibility should be examined. Including this concept when looking at sustainability
accounting can generate interesting insights. Firstly, the concept of corporate social
responsibility should be included in the analysis, with particular attention to the issue of
integration of sustainability. Additionally, the main characteristics and dynamics of the concept
of corporate social responsibility should be identified, as well as their influence on accounting
The objective of this study is to contribute to the existing research on accounting sustainability
and corporate social responsibility, and to fill the already highlighted gaps in literature, namely
the absence of research that is both empirically and theoretically relevant on sustainability
accounting, and that provides insights on the impact of sustainability accounting on corporate
social responsibility. In this perspective, the purpose is to explore the relationship between
sustainability accounting and corporate social responsibility. Furthermore, the objective is to
investigate how sustainability accounting is affected by the concepts of corporate social
responsibility, in particular with regard to the need for controlling and steering the company in
order to drive corporate and sustainability performance on the one side, and the need to answer
to the external pressure of stakeholders on the other side.
The purpose for this research is to probe into the evaluation of the impact of accounting
sustainability in cooperate social responsibility using MTN LTD as a case study with a view to
find out how the organization is performing with accountant sustainability and corporate social
The following are the specific objectives of the study:
To identify the dimensions of corporate social responsibility.
To evaluate the relative importance of accounting sustainability to MTN LTD.
To evaluate the corporations’ performance on the employee.
To synthesise the results of the relative importance and performance evaluation scores.
This study specifically focuses on the relationship between accounting sustainability and
corporate social responsibility.
The general research question to be examined and explained is as follows:
The following research questions have been formulated in order to answer the general research
What is the strength of the association between levels of corporate social responsibility (CSR)
and accounting sustainability using MTN LTD as case study.
1. How do sustainability leaders manage the function of sustainability accounting?
2. Is there a positive association between accounting sustainability and higher levels of
corporate social responsibility (CSR)?
3. How is corporate social responsibility influenced by sustainability accounting, and how
can the relation between them be explained?
4. Is there any relationship between higher levels of corporate social responsibility and
accounting sustainability?
The following hypotheses are formulated in null form to guild the study.
H0: Accounting sustainability does not have effect on corporate social responsibility.
H1: Accounting sustainability has effect on corporate social responsibility
H0: There is no relationship between corporate social responsibility and organizational
H1: There is no relationship between corporate social responsibility and organizational
In pursuance of the objective of the study; attention shall be focused on accounting
sustainability, the effect of corporate social responsibility. Identifying the levels of accounting
sustainability that are used by companies frames the boundary of this study. In addition, this
study examines MTN LTD. To support the purpose of this study, relevant literature has been
reviewed that seeks to identify gaps that need to be addressed in the literature.
In view of the technicalities involved, information that will be gathered will be limited to those
accesses and made available by the respondents and also those gathered from end users.
However, the impacts of this limitation will be reduced to the barest minimum. Also, the
anticipation of likely problems like unwilling attitude of the respondent to give information they
consider confidential and problems associated with the collection of questionnaires.
Its major limitation might be the problem of getting information from the institution under study.
As a communication company, there is always the fear of giving out information to the public as
such, vital information needed might not be easy to get. Time equally will not be left out; leaving
school and the issue of finance cannot be ignored as much will be spent in procuring materials.
However, with fact and judicial use of the limited resources, reasonable analyses have been
carried out in this research work.
This research consists of five chapters. Chapter one, which is the introductory part contains the
background of the study, the statement of the research problem, objectives of the study, research
questions among others. Chapter two, deals with the literature review and theoretical framework.
Chapter three consists of the research methodology. Chapter four deals with data presentation,
analysis, result and interpretation. Chapter five is the summary, conclusion and recommendation.
To achieve the aims and objectives of this research, this research will be based on different
sources or means of getting relevant information. The researcher uses both the primary and
secondary data in the study. The primary data are collected by the researcher through
questionnaire and personal interview in order justify any information given while the secondary
data are data collected from journals and libraries.
The study used both descriptive and inferential statistics in analyzing the data. Also, simple
percentages will be used to analyze the questionnaires.
Research design is the framework that will guide the in the process of collecting, analyzing and
interpreting observations. In actual fact, it reveals inferences concerning causal relations and
defines the domain of generalizing. It is the research design that brought about the fundamental
How would the study be brought into scope of the research? And more importantly, how the
study subject would be employed within the research settings (Atoyebi 2013: 36)
However, survey method will be used as the basic approach of the study. The method attempts to
be fairly representative of the population of interest in its selection of its sample of study.
A survey according to Ezejule A.U and ogwo O.E (1990) simply consists of collecting data or
information about a large number of people by interviewing a representative sample of them.
Descriptive survey method is so popular amongst researchers, that it is often mistaken as being
the same with all descriptive research. Thus questionnaire and secondary data were the
instruments that will be adopted in the descriptive survey approach to obtain desired information.
Therefore, the research design that will be used for the purpose of this study is descriptive survey
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