Abstract

The article presents the author's comments on social responsibility of business enterprises. The author says that fundamental innovation will require that businesses give up the idea that simple profit maximization and transactions proliferation are by themselves adequate proxies for social welfare. This means that social accounting will require some ideological change. People almost always hang onto things that they don't like and know to be inadequate, if something better isn't in sight. The article asserts that social welfare excludes whatever lies outside the realm of transactions. These exclusions are increasingly the center of businessmen's concerns, giving them the feeling that they are the victims of premature closure. Breaking closure and then re-creating it around a bigger universe is tough work, especially if the smaller universe has been the scene of great accomplishments. But that's what social accounting and the search for the social audit are all about. If accountants want to find sophisticated measurements to deal with external costs and benefits that lie outside the realm of transactions, they will find them only by inventing new kinds of accounting. The author then discusses various aspects of social audit.