The Accounting Issues on Social Enterprise
Asian Tax Journal Vol. 18 No. 1 (2017), pp. 237-252
Abstract
The purpose of this study is to investigate the requirements of social enterprise certification and the requirements related to social enterprise’s sustainability and public interest among the accounting standards to be applied by social enterprises. Under the social enterprise promotion law, which is the basis for the existence of social enterprises, the accounting standards to be applied by social enterprises are not uniformly defined, and they are different according to the legal basis of each social enterprise. The accounting standards that social enterprises should apply are not the full adoption of general corporate accounting standards and SME accounting standards. Therefore, there are some differences between the social enterprise promotion law and accounting－related contents and terms in generally accepted accounting principles, which may cause confusion among social enterprise and social enterprise stakeholders. In addition, there is a high probability that confusion will arise in communication with stakeholders because accounting for social enterprises often involves a mixture of cash and accrual accounting. In this study, we tried to improve the transparency and communication of accounting, which is the corporate language, through solving these problems. At the same time, the contents and terminology of accounting standards for judging sustainability and public interest, which are the main certification requirements of social enterprises, were clarified and they were intended to help to operate and cultivate social enterprises. The contributions and limitations of this study are as follows. This study aims to avoid the confusion of contents related to the accounting of social enterprises and to eliminate the confusion of terms and unify them. It is expected that this will help the application of accounting by social enterprises and social enterprise stakeholders and will help to revise related laws and regulations in the future. However, there are limitations in not conducting empirical analysis based on actual accounting information or financial data of social enterprises and not based on in－depth survey of facts reflecting all opinions of social enterprises.
Keywords
- Law of Promotin of Social Enterprise
- Social Enterprise Certification
- Social Enterprise Accounting Issues
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