Abstract
Corporate Social Responsibility (CSR) goes through various stages of evolution and integration which is researched and detailed by Visser (Journal of Business Systems, Governance and Ethics 5:7, 2010), and according to this framework different kinds of values are generated for a target group of stakeholders; this should find a reflection in the way CSR is accounted for. The current study is based in India and proposes to do the same to ensure CSR implementation, and its cost and benefits are being fairly represented in books of accounts. Recent research on CSR confirms the existence of the “social impact hypothesis” (Waddock and Graves in Strategic Management Journal 18:1–34, 1997) suggesting that better and sincere CSR performance results in not only fulfilling stakeholders’ expectations but also building stakeholder’s trust (Verma and Singh in IIM Kozhikode Society & Management Review 5:1–13, 2016), which in turn may lead to an enhanced reputation and superior financial performance for the organizations. The latter half of the chain effect, i.e. stakeholder trust leading to enhanced reputation which in turn leads to superior financial performance is defined by the authors as the “multiplier effect” of CSR activities. Law and accounting standards play an important role in establishing a framework for corporate commitment and management discipline toward CSR activities (Aras and Crowther in global perspectives on corporate governance and CSR, Gower publishing, 2009). According to Krstic and Dordevic (Economics and Organization 7:335-348, 2010)), no longer can the accounting profession afford to be a mere witness to the core changes happening in modern companies. The main argument in legislating CSR activities for Indian companies is the recognition of a vital role by corporates in Nation Building. Therefore, any outflow of funds incurred during the “multiplier phase” of CSR activities should not by default be expensed in the profit and loss statement. The current paper recommends the measurement of intangible assets arising out of nation building activities by corporates during the multiplier phase.
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Pathak, T., Tewari, R. (2020). CSR and Nation Building Agenda in India: An Accounting Framework for “Multiplier” Effect of Corporate Social Responsibility. In: Crowther, D., Seifi, S. (eds) CSR and Sustainability in the Public Sector. Approaches to Global Sustainability, Markets, and Governance. Springer, Singapore. https://doi.org/10.1007/978-981-15-6366-9_9
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