Corporate Social Responsibility and its Impact on Business

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FINANCIAL ACCOUNTING THEORY
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Executive summary
In the part of the company, it is evaluating the importance of corporate social responsibility by
the company towards social welfare. CSR is important or have a crucial role in the management
of the company and also in the development of the company and the person who has an interest
in the activities of the business. The Water Partners company provides a services to its
clientsregarding the CSR and the way or method or tools of the CSR principles that should be
followed by the company to get take an exemption on the payment of tax by following the norms
and develop the society like make donation to the special sector like in the area of to improve the
area where the people get affected by the natural calamities, any high-level disease such as
cancer and other. By doing this, the company is able to take a rebate on tax from the government
side and the saved amount spend on the development of the society.
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Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Section 1..........................................................................................................................................5
Section 2..........................................................................................................................................6
Section 3..........................................................................................................................................7
Section 4..........................................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction
In this report of the company, the role, and importance of CSR (Corporate Social
Responsibility). The report contains the various issues of CSR related to environmental,
economic and others which affect the company. To follow CSR norms, it is mandatory for every
company in order to sustain in the competitive market but as seeing that companies based in
Bangladesh do not follow the corporate social responsibility norms. The report shows the
relationship between the CSR and company and why it is important in business to follows their
rules and principles. The report shows the way to solve issues in corporate social responsibility
by applying the accounting theories in an efficient way in order to work or run the business in
smooth manner so that it enables to eliminate the other issues that affect the social welfare and
even its stakeholders like customers, clients, lenders or borrowers and others.
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Section 1
In this, it is research on the CSR of the company in depth and the quality of research is maintain
by doing depth research of the issues that are seen from the article given related with the firm
charatertsicts, CSR and board diversity. The firm having a business of providing consultancy
services from the different sectors of the market or industry. Here the firm who provide such
service is named with Water Partners “group of people”. There is an increment ion the checkups
of the business practice of the business in recent years seen in the developing countries due to the
high or more demand for the better use of CSR within business management (Coulson-Thomas,
2015). This is more emphasis on the awareness of the stakeholder’s of the company. The
company takes advantages of tax rebate on the payment of the amount by contributing to
economic, social and environmentaldevelopment. This is a benefit to both parties (company and
society) through the contribution made by the company for the purpose of developing social
welfare. From the article seen that still public company accepted CSR within their organization
at low but the positive view is that company start to use CSR and this will develop the entire
organization and stakeholders of the company that has an interest and influence the company
decio0n by their activities like change in policy by the lender for the purpose of lending amount.
The report is covered a wide range of the issue related with the CSR likeinitiatives related with
environmental sustainability, direct philanthropic, practices regarding ethical business and most
important is economicresponsibility of the company (Muttakin, et. al., 2015). The entire report
has displayed the issues that affect company performance at the overall level whetherfinancial or
non-financial. Company should apply proper norms of CSR in order to eliminate or not face a
dilemma of issueregarding the compliance with CSR because nowadays CSR in the company is
also animportant factor associated with both company and stakeholder s development and growth
for a long time and through this company also take a benefits in the part of tax where a deduction
of 10 percent getting while when company make a contribution to a government recognized
sector and another sector which helps in developing the living standard of the general people like
made donation towards the growth and improve the living standard of those who faced natural
calamities.
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Section 2
In this section it has been seen various issues that were related to the CSR, means corporate
social responsibility, it defines the responsibility of the companies towards social welfare. In this
section of the report, seen different issuesthat were related to the CSR within the
businessenvironment. The issue was that companies based in Bangladesh have no provision
regarding the CSR for the listed company which called the public company. The issues
wererelated to the three different sectors which are concern part for the companies in order to
develop social and the environment aswell asbusiness conditions. The CSR covers a wide range
of issues that should be considered into the account for conducting business activities (Jeppesen,
et. al., 2017). The issues included in CSR are basically the working conditions for the employee,
human rights, corporate governance, gender equality and many more.First of the issue were
found by the search was related to the economic sector, from this, it found the issue that affects
the economics of the country as well as business. Such issues were crop diversification, rate of
employment generation, agricultural production, education, and training will be considered as the
main issues have come under CSR.These issues were related to the economic. On the other hand
in environmental issues were issues such as carbon emission and pure water management waste
management and ecological balance will fall under environmental activities.The other main issue
in CSR for the company of Bangladesh is that that company not comply or not focus on the CSR
activities like prohibiting child labor, providing equal or same opportunities to everyone in order
to work and show theirskills and talent to the world. The issue ion CSR can be found t=by the
process or method of compliance with the CSR norms. If the company does not follow CSR
norms or rules within the organization then itshould not be able to grow in future because of not
concentrate on the development of the social welfare like the development of its employees and
others that will directly help the company in order to generate profit with less cost incurred (Fan,
et. al., 2018).
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Section 3
There are various accounting theories that must be applied to the issue that was found in the task.
The accounting theory helps to sort out the issue which isoccurred in the company CSR that
affect the companydevelopment t as well its growth. Some of the accounting theories that use in
the company of Water partners in order to solve the issues that were seen. Following are some
theories that might be help Company to overcome the situations (Harrison, et. al., 2019).
Stakeholders:
For the company, to grow and be want to be sustained in the competitive market it is necessary
for the company should keep the interest of its customers, employees, lenders, suppliers and
another person who has an interest on the affairs of business activities. This theory addresses
numerous issues that wereassociated with the relationship with the stakeholders like to focus on
the privileges of stakeholders. This theory is the best availabletheory out of the other because of
it providesthebetter explanation of firm’s role attributes and alsoprovide a balance between
welfare and interest of stakeholders ensuring that each stakeholderreceived a good satisfaction
from (Johnstone, 2018)
Legitimacy theory:
It can be said as a postulation that the business activity is going in an appropriate way with the
socially build of systems like rules and regulations and norms and value and beliefs of the
society. It is one of the theories that help in providing guidance or framework due to it is difficult
to distinct or separates the legitimacy idea from the value of society. Since it is mandatory for the
company to follow the rules and norms of the society in order developed the social welfare and
company as well.
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Agency theory:
This theory is basicallydepending on the relationship between principle agents. There is a distinct
part of the company and management give an idea of functioning regarding the theory of agency.
For this, people know as agent is recruiting in order to manage the company daily basis events.
This theory helps in solving the problems of agency by monitoring the activities of management,
increase and examine the process of a financial reporting system. It is a belief by the company
that through the use of a high level of accountability helps in minimize the conflict between
management and with the business owners. This can be used as a tool for monitoring
management activities.
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Section 4
Here it has been discussing how accounting theories used by the Water Partners Company for the
aim of solving the issues related to the CSR within the company. The accounting theories used
by the company in a proper way because of the purpose are clear to solve the issues in CSR. This
part of the report based on the method of solves the issues in CSR by implementing the various
accounting theories as discussed in the above part. Each accounting theory is most related and
relevant to the solving of CSR' issues raised on the report provided. As stakeholder’stheory
hasatop priority among others the growth of the society as highest levels its means social
orientation over the other responsibilities or duties of the business. This theory suggests that
good business development and growth exist between the buildings of relationship and
creatingvalues for the company stakeholder who may within the company and even outside the
company, it doesn’t matter. It addresses the values and morals in the part of managing the
company like related to the CSR, market and social theory or ethics. As the control is in the hand
of the directors of the company while the company indirectly owned by its shareholders.
Directors of the company not acting like in the interest of the shareholders (Laidroo, and
Sokolova, 2015). Hence this theory provides a clear image or picture reading the management of
the company the owner of the company. Through this, everyone knows his duty and
responsibility towards the company because of clarification on their parts.The problems of CSR
in legitimacy theory helps reduce the issue with the contract between the CSR constitute towards
the society and company and what is deliveredtowards them. With the understanding of CSR, it
is expected by the company that business is expected to carry a less or high level of
responsibilitiesrelated with the corporate that will contain the legal and economic, socio-
economic and other. Therefore it can be said that all the three above discuss theories help the
company in order to solve the problemsregarding theimprovement of CSR within and outside the
company towards the social welfare and other people.
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Conclusion
Here it is concluded that Corporate Social Responsibilityhas an important [art in business
regarding the welfare and development of the society and its employees as well.After the
research of the report analyzed and concluded that company who is public not followed the SCR
norms and principlesand those followed to get to take benefits in tax exemption limit due to such
amount is invest in the welfare of the society and through this company will eligible to allow tax
rebate on the profit which is earned by the company during the year from its business activities.
The outcomes showed that the size of business and the significant disclosure that were linked
with CSR that was an indication of the firms successfully running its business affairs. CSR now
increases and accepted by most of the company and gradually it increases day by day in order to
accept and apply CSR norms within the company due to accepting this made a benefit to both
government and company. To the government, it will reduce expensesincurred in the above-said
areas and such capital use in further activity in the development of the people and for company
help in reducing the tax amount due to take tax rebate from the provision of tax.
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References
 Jeppesen, S., Lund-Thomsen, P. and Jamali, D., 2017. SMEs and CSR in Developing
Countries.
 Johnstone, L., 2018. Environmental management decisions in CSR‐based accounting
research. Corporate Social Responsibility and Environmental Management, 25(6),
pp.1212-1222.
 Laidroo, L. and Sokolova, M., 2015. International banks’ CSR disclosures after the 2008
crisis. Baltic Journal of Management, 10(3), pp.270-294.
 Coulson-Thomas, C., 2015. CSR Strategy: Width or Depth. Corporate Social.
 Harrison, J.S., Barney, J.B., Freeman, R.E. and Phillips, R.A. eds., 2019. The Cambridge
Handbook of Stakeholder Theory. Cambridge University Press.
 Fan, F., Shixuan, W., Jie, G. and Wei, S., 2018, July. A Review of Corporate Social
Responsibility in Accounting Studies. In 2018 15th International Conference on Service
Systems and Service Management (ICSSSM) (pp. 1-5). IEEE.
 Muttakin, M.B., Khan, A. and Subramaniam, N., 2015. Firm characteristics, board
diversity and corporate social responsibility: evidence from Bangladesh. Pacific
Accounting Review, 27(3), pp.353-372.
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