RECENT TRENDS IN ACCOUNTING

1. CORPORATE SOCIAL RESPONSIBILITY ACCOUNTING

2. FORENSIC ACCOUNTING
3. HUMAN RESOURCE ACCOUNTING

CSRA
MEANING:
The social responsibility of a business refers to the obligation and accountability of a
company to act in a way that benefits society as a whole, in addition to pursuing its primary
economic objectives. It includes a range of actions and policies that a company can take to
contribute to the well-being of society and the environment.
CSR ACTIVITIES:
Corporate social responsibility (CSR) can take many forms, including:
1. Environmental sustainability: A business can reduce its carbon footprint, conserve
natural resources, and reduce waste to minimize its impact on the environment.
2. Philanthropy: A business can donate money, products, or services to charitable
causes, such as community development, education, or health initiatives.
3. Ethical business practices: A company can ensure that it operates in an ethical and
transparent manner, including fair treatment of employees, avoiding corrupt
practices, and ensuring supply chain responsibility.
4. Employee well-being: A company can provide a safe and healthy work environment,
support employee health and wellness, and offer fair wages and benefits.
5. Community engagement: A business can actively engage with the community in
which it operates, supporting local organizations and initiatives and providing
opportunities for community involvement.
Overall, the social responsibility of business is about recognizing that companies have a
broader impact on society and the environment beyond their primary goal of maximizing
profits. By taking steps to be socially responsible, companies can help create a better world
for everyone, while also enhancing their reputation and building a stronger relationship with
stakeholders.
ADVANTAGES OF CSR:
Corporate Social Responsibility (CSR) offers a wide range of benefits and advantages for
businesses, some of which include:
Enhanced reputation and brand image: CSR initiatives can help businesses build a positive
reputation and brand image, which can improve customer loyalty and increase the
attractiveness of the company to potential employees and investors.
Increased customer loyalty: Consumers are becoming more socially and environmentally
conscious, and they are more likely to support businesses that engage in CSR activities. By
demonstrating a commitment to social responsibility, companies can build customer loyalty
and strengthen their customer base.
Improved employee morale and motivation: CSR activities can help to increase employee
motivation and job satisfaction by creating a sense of purpose and meaning in their work.
Employees tend to be more engaged and loyal when they work for a company that is
committed to making a positive impact on society and the environment.
Reduced risk and cost savings: CSR initiatives can help companies to reduce risks and costs
associated with environmental and social issues, such as legal penalties, reputational
damage, and lost business opportunities. For example, a company that invests in sustainable
practices can reduce waste and energy consumption, which can lead to significant cost
savings.
Access to new markets and customers: CSR initiatives can help companies to access new
markets and customers, particularly those that value social and environmental
responsibility. By catering to the needs of these markets, companies can expand their
customer base and increase their revenue.
Overall, CSR activities can provide significant benefits for businesses, including increased
brand reputation, customer loyalty, employee morale and motivation, risk reduction and
cost savings, and access to new markets and customers. By embracing CSR, companies can
create long-term value for all stakeholders while also making a positive impact on society
and the environment.
CRITERIA FOR CSR AS PER COMPANY ACT 2013:
The Companies Act 2013 in India mandates that certain companies are required to
undertake Corporate Social Responsibility (CSR) activities. As per the Act, the criteria for CSR
are as follows:
1. Applicability: Every company having a net worth of Rs. 500 crore or more, or
turnover of Rs. 1,000 crore or more, or a net profit of Rs. 5 crore or more during any
financial year, is required to constitute a CSR committee.
2. Composition of CSR Committee: The CSR committee should consist of at least three
directors, one of whom should be an independent director.
3. Formulation of CSR Policy: The CSR committee is required to formulate and
recommend a CSR policy to the Board of Directors, which should specify the
activities to be undertaken by the company as per Schedule VII of the Act.
4. Implementation of CSR activities: The Board of Directors should ensure that the
company spends, in every financial year, at least 2% of the average net profits of the
company made during the three immediately preceding financial years on CSR
activities.
5. Reporting: The Board of Directors should prepare an annual report on CSR activities
and disclose the details of the CSR policy and the amount spent on CSR activities in
its annual report and website.
6. The Act also specifies the areas in which companies can undertake CSR activities,
which include eradicating extreme hunger and poverty, promoting education,
promoting gender equality and empowering women, reducing child mortality and
improving maternal health, combating HIV, malaria, and other diseases, ensuring
environmental sustainability, employment enhancing vocational skills, social
business projects, and rural development projects.
Overall, the Companies Act 2013 aims to promote responsible business practices and
encourage companies to undertake CSR activities for the benefit of society and the
environment.

CONCEPT OF SOCIAL ACCOUNTING:

Social accounting refers to the process of reporting and measuring a company's social,
environmental, and ethical performance. It involves identifying and measuring the impact of
a company's operations on society and the environment, and reporting this information to
stakeholders, such as investors, customers, employees, and the general public.
The main goal of social accounting is to provide a comprehensive view of a company's
performance beyond financial measures. It allows stakeholders to assess a company's
impact on society and the environment, and to make informed decisions based on this
information.
Social accounting typically involves collecting and analyzing data on a company's social and
environmental performance, such as greenhouse gas emissions, water usage, waste
generation, employee diversity and inclusion, and community engagement. This information
is then reported in social accounting reports, which can be used to evaluate a company's
overall performance.
Social accounting can be voluntary or mandated by law or industry regulations. Some
companies choose to undertake social accounting as part of their Corporate Social
Responsibility (CSR) initiatives, while others are required to report on their social and
environmental performance as a condition of doing business.
Overall, social accounting provides a way for companies to communicate their non-financial
performance to stakeholders and to be held accountable for their impact on society and the
environment. It can also help companies identify areas for improvement and to take steps
to mitigate their negative impact on society and the environment.

APPROACHES OF SOCIAL ACCOUNTING:

In 1971, the Public Affair council(Washington) Report by David F. Fetyko has suggested
three approaches to social responsibility, which are as follows:
The Minimalist Approach: This approach suggests that companies should only fulfill their
basic legal and ethical obligations and should not go beyond that. According to this
approach, a company's primary responsibility is to maximize profits for its shareholders, and
any activities beyond that are not necessary.
The Moderate Approach: This approach suggests that companies should take a more
proactive role in social responsibility by voluntarily engaging in activities that go beyond
their basic legal and ethical obligations. According to this approach, companies have a
broader responsibility to society and the environment, and should strive to make a positive
impact on both.
The Maximalist Approach: This approach suggests that companies should fully embrace
social responsibility and make it an integral part of their core business strategy. According to
this approach, companies should go beyond simply doing no harm and actively work to
make a positive impact on society and the environment.
Fetyko suggests that the optimal approach to social responsibility may vary depending on
the company's size, industry, and other factors. However, he argues that companies that
take a proactive approach to social responsibility are likely to reap benefits such as
increased customer loyalty, improved reputation, and enhanced employee engagement.
Additionally, companies that embrace social responsibility may also be better equipped to
adapt to changing societal and environmental conditions and to manage risks related to
these issues.

FORENSIC ACCOUNTING
Forensic accounting is a specialized field of accounting that involves the application of
accounting, auditing, and investigative skills to analyze and uncover financial information for
use in legal proceedings. Forensic accountants are often hired by lawyers, government
agencies, or corporations to investigate financial fraud, embezzlement, and other financial
crimes.
Forensic accountants use a combination of accounting and investigative techniques to
gather, analyze, and interpret financial data. They may examine financial records, conduct
interviews with individuals involved in the case, and use computer forensic techniques to
uncover evidence of financial wrongdoing.
In addition to detecting and investigating financial crimes, forensic accountants may also
provide expert testimony in court or other legal proceedings. They may also assist in the
development of fraud prevention and detection programs for businesses and other
organizations.
The primary objective of forensic accounting is to analyze financial information to detect
fraudulent activities, financial irregularities, and to provide evidence that can be used in a
court of law. Forensic accountants may work on cases involving white-collar crimes, such as
embezzlement, money laundering, and securities fraud, as well as civil litigation cases
involving economic damages, bankruptcy, and contract disputes.

ELEMENTS OF FORENSIC ACCOUNTING:

1. Forensic accounting is a specialized field that requires a unique set of skills and
knowledge. Some of the key elements of forensic accounting include:
2. Accounting and Auditing: Forensic accountants must have a strong understanding of
accounting principles and auditing procedures. This allows them to analyze financial
data and identify irregularities that may indicate fraud or other financial crimes.
 3. Investigation: Forensic accountants must be skilled investigators. They must be able
to gather and analyze financial data, interview witnesses and suspects, and track
down leads to uncover evidence of financial wrongdoing.
4. Computer Forensics: In today's digital age, forensic accountants must also have
knowledge of computer forensics. This involves using specialized software and
techniques to recover data from electronic devices and networks, such as emails,
accounting software, and financial records.
5. Legal Knowledge: Forensic accountants must have a good understanding of the legal
system and the rules of evidence. They may be required to provide expert testimony
in court or other legal proceedings, so they must be familiar with the legal process
and be able to present complex financial data in a clear and understandable manner.
6. Communication Skills: Forensic accountants must be effective communicators. They
must be able to explain complex financial concepts to non-financial professionals,
such as lawyers and judges, and present their findings in a clear and concise manner.

Overall, forensic accounting requires a unique blend of skills and knowledge in order
to effectively investigate financial crimes and provide expert testimony in legal
proceedings.

METHOD OF FORENSIC ACCOUNTING:

Forensic accounting involves a variety of methods to investigate financial wrongdoing and
provide expert testimony in legal proceedings. Here are some common methods used in
forensic accounting:
1. Data Analysis: Forensic accountants may analyze large sets of financial data to
identify patterns and anomalies that may indicate fraud or other financial crimes.
They may use specialized software to perform data analysis and create visualizations
to help communicate their findings.
2. Asset Tracing: Forensic accountants may use various techniques to trace assets and
determine their origin, movement, and disposition. This may involve analyzing bank
statements, financial records, and other documents to track the flow of money and
identify potential sources of financial fraud.
3. Interviewing: Forensic accountants may conduct interviews with individuals involved
in the case, including suspects, witnesses, and employees of the organization. They
may ask questions to gather information about financial transactions and identify
potential sources of financial wrongdoing.
 4. Fraud Risk Assessment: Forensic accountants may conduct fraud risk assessments
to identify areas of weakness in an organization's financial controls and
develop strategies to prevent fraud and other financial crimes.
5. Expert Testimony: Forensic accountants may provide expert testimony in
court or other legal proceedings. They may be called upon to explain financial
concepts and present their findings to judges, juries, and other stakeholders.
Overall, forensic accounting involves a range of methods to investigate
financial wrongdoing and provide expert testimony in legal proceedings. The
specific methods used will depend on the nature of the case and the goals of
the investigation.

ADVANTAGES OF FORENSIC ACCOUNTING:

Forensic accounting offers several advantages, including:

1. Fraud Detection: Forensic accounting can help to detect financial fraud and
other financial crimes. By examining financial records, analyzing data, and
conducting interviews, forensic accountants can uncover evidence of
wrongdoing and help to prevent future fraud.
2. Legal Support: Forensic accountants can provide expert testimony in court
and other legal proceedings. They can help to explain complex financial
concepts and present evidence in a clear and concise manner, which can be
critical in determining the outcome of a case.
3. Risk Management: Forensic accountants can help to identify and mitigate
financial risks. By conducting fraud risk assessments and reviewing financial
controls, they can help organizations to prevent and detect financial fraud and
other financial crimes.
4. Asset Recovery: Forensic accountants can help to trace and recover assets
that have been misappropriated or stolen. They can use various techniques,
such as asset tracing and data analysis, to identify the location of missing
assets and help to recover them.
5. Improved Financial Controls: Forensic accounting can help organizations
to improve their financial controls and prevent financial fraud. By identifying
weaknesses in financial controls and recommending improvements, forensic
accountants can help to reduce the risk of financial fraud and other financial
crimes.

Overall, forensic accounting offers several a dvantages for organizations and

individuals who are seeking to prevent and detect financial fraud and other
financial crimes. By employing the skills and knowledge of forensic accountants,
they can better manage financial risks, recover stolen assets, and improve their
financial controls.
LIMITATIONS OF FORENSIC ACCOUNTING:

While forensic accounting can be a valuable tool in uncovering financial fraud and
providing evidence for legal proceedings, there are also some limitations to this
approach. Here are a few examples:

Limited access to information: Forensic accountants rely on the financial

information available to them, which may be incomplete or unavailable due to
reasons such as the destruction of records or the unwillingness of individuals to
provide access to financial documents.

Inability to detect all types of fraud: While forensic accountants are skilled in
detecting financial fraud, there may be some types of fraud that are difficult to
detect through financial analysis alone. Some types of fraud may be perpetrated
through non-financial means, such as social engineering or bribery.

Time constraints: Conducting a thorough forensic accounting investigation can be

time-consuming, and there may be pressures to complete the investigation quickly,
especially if the results are needed for a pending legal case. This can lead to a trade-
off between the quality of the investigation and the time available to complete it.

Costly: Forensic accounting investigations can be expensive, especially if they

require extensive data analysis or involve complex financial transactions. This can
make it difficult for smaller companies or individuals to afford the services of a
forensic accountant.

Limited legal authority: Forensic accountants are not law enforcement officials
and do not have the authority to conduct searches or seizures. They rely on the
cooperation of the parties involved in the investigation, which may not always be
forthcoming.

Overall, while forensic accounting can be an effective tool for detecting financial
fraud and providing evidence for legal proceedings, it is important to be aware of its
limitations in order to make informed decisions about when and how to use this
approach.

HUMAN RESOURCE ACCOUNTING

Human resource accounting is the process of identifying and measuring the value of
the human resources within an organization. This involves assigning a financial value
to the knowledge, skills, experience, and other attributes of employees, and
accounting for these values in the organization's financial statements.

Flamholtz and Bullen (1986), who define HRA as "the measurement and
quantification of all the costs and value of people to organizations".

Need/Reasons why human resource accounting can be beneficial:

 1. Provides a more complete picture of the organization's assets: Human
resource accounting recognizes that employees are an important asset to an
organization, and that their value is not just limited to their salaries and
benefits. By accounting for the value of human resources, organizations can
get a more complete picture of their assets and the overall financial health of
the organization.
2. Helps in better decision making: Human resource accounting can help in
making better decisions related to employee recruitment, retention, and
development. By quantifying the value of different employees, managers can
make more informed decisions about which employees to invest in and which
positions to prioritize.
3. Helps in performance measurement: Human resource accounting
provides a basis for measuring the performance of employees and
departments. By assigning a value to the knowledge, skills, and experience of
employees, it becomes possible to track the impact of training and
development programs and to identify areas for improvement.

4. Helps in resource allocation: Human resource accounting can help in

allocating resources more effectively. By understanding the value of different
employees, managers can make better decisions about where to allocate
resources and where to cut back.
5. Compliance: Some regulatory bodies require companies to account for the
cost of human resources in their financial statements. Human resource
accounting helps in complying with these requirements.

Overall, human resource accounting can help organizations to better understand and
manage their human resources, make more informed decisions, and comply with
regulatory requirements.

Aspects of human resource accounting

Human Resource Accounting, is an accounting method used to measure the value of
human resources in an organization. Here are three aspects of HRA:

1. Valuation: HRA involves the process of quantifying the value of human

resources in an organization, which includes determining the worth of the
knowledge, skills, abilities, and experience of employees.
2. Reporting: HRA involves reporting the results of the valuation and
measurement processes to stakeholders within the organization, such as
managers and investors. The results of HRA can be used to inform decisions
related to recruitment, training, and retention of employees, as well as to
evaluate the overall performance of the organization's human resources.
3. Disclouser: HRA involves disclouser of human capital to stakeholders within
the organization, such as managers and investors as well as to potential
employees.

APPROACHES OF HUMAN RESOURCE ACCOUNTING:

Human Resource Accounting (HRA) is a branch of accounting that focuses on
quantifying and reporting the value of an organization's human resources. There
are two main approaches to Human Resource Accounting:

1. Cost-based Approach: This approach involves measuring the cost

incurred in recruiting, selecting, training, developing, and retaining
employees. The cost of human resources is measured in terms of direct
costs such as salaries, benefits, training, and recruitment costs, as well as
indirect costs such as absenteeism, turnover, and lost productivity. This
approach helps organizations to identify areas where they can reduce their
HR costs.
2. Economic Value-based Approach: This approach involves measuring
the value that human resources bring to an organization in terms of their
contribution to the organization's productivity and profitability. The
economic value of human resources is measured in terms of their skills,
knowledge, abilities, and experience, and their impact on the
organization's performance. This approach helps organizations to

assess the contribution of human resources to the organization's overall

success and to identify areas where they can improve their HR practices to
increase their economic value.

OBJECTIVES OF HUMAN RESOURCE ACCOUNTING:

Human Resource Management (HRM) is a strategic approach to managing

an organization's employees in order to achieve the organization's goals
and objectives.

1. Recruitment and Selection: HRM aims to attract and select the

right employees for the right job. This involves identifying job
requirements, advertising job openings, screening resumes,
interviewing candidates, and selecting the best fit for the position.

2. Training and Development: HRM aims to provide employees with

the necessary knowledge, skills, and abilities to perform their jobs
effectively. This involves designing and delivering training
programs, coaching and mentoring, and providing opportunities for
personal and professional growth.

3. Performance Management: HRM aims to monitor and evaluate

employee performance in order to improve productivity, quality of
work, and employee

engagement. This involves setting performance goals, providing

feedback, and assessing performance.
 4. Compensation and Benefits: HRM aims to provide employees
with competitive compensation and benefits packages in order to
attract and retain the best talent. This involves developing
compensation and benefits plans, managing payrolls, and
administering employee benefits.

5. Employee Relations: HRM aims to create a positive work

environment where employees feel valued and respected. This
involves developing policies and procedures that promote fairness,
resolving conflicts, and maintaining a positive relationship between
employees and management.

6. Compliance with Laws and Regulations: HRM aims to ensure

that the organization complies with all applicable laws and
regulations related to employment. This involves developing
policies and procedures that comply with labor laws, health and
safety regulations, and other employment-related laws.

Overall, the objectives of HRM are to maximize employee productivity, improve

employee engagement, and create a positive work environment that supports the
organization's strategic goals and objectives.

ADVANTAGES OF HUMAN RESOURCE ACCOUNTING:

Human Resource Accounting (HRA) provides a number of advantages to
organizations that implement this approach. Some of the advantages of HRA include:

1. Better Decision Making: HRA provides valuable information

about the value of an organization's human resources, which helps
managers to make informed decisions about HR-related matters
such as recruitment, selection, training, and development. HRA also
helps managers to evaluate the effectiveness of HR practices and
make adjustments where necessary.
2. Improved Resource Allocation: HRA helps organizations to
identify the areas where their HR resources are most effectively
utilized and to allocate resources more efficiently. This can help
organizations to reduce costs, improve productivity, and achieve
better financial results.

3. Enhanced Employee Engagement: HRA helps organizations to

identify and recognize the contributions of their employees, which
can help to improve employee engagement and motivation. When
employees feel valued and recognized for their contributions, they
are more likely to be committed to the organization and to perform
at a higher level.
4. Improved Organizational Performance: HRA helps
organizations to measure the impact of their HR practices on
organizational performance and to identify areas where they can
improve their practices. This can help organizations to achieve
 better results, improve customer satisfaction, and enhance their
reputation.
5. Competitive Advantage: HRA can provide a competitive
advantage by enabling organizations to identify and develop their
key talent, and to implement HR practices that support the
organization's strategic goals and objectives. This can help
organizations to attract and retain top talent, which is critical to
achieving long-term success.

LIMITATIONS OF HUMAN RESOURCE ACCOUNTING:

While Human Resource Accounting (HRA) provides many advantages to
organizations, it also has several limitations that should be considered. Some of the
limitations of HRA include:
1. Subjectivity: HRA involves many subjective judgments about the value of
human resources, which can make the results of the analysis less objective.
For example, it can be difficult to accurately quantify the value of intangible
assets such as knowledge, skills, and experience.
2. Costly and Time-Consuming: Implementing an HRA system can be costly
and time-consuming, especially if it requires significant changes to the
organization's existing accounting and HR systems. Additionally, gathering
and analyzing the data required for HRA can be a time-consuming process.
3. Difficulty in Standardizing Metrics: There is no consensus on the standard
metrics and formulas to be used in HRA, which can lead to inconsistent and
unreliable results.
4. Lack of Acceptance: Some stakeholders may not accept the results of HRA
or may not be willing to base their decisions on HRA data. This can limit the
usefulness of HRA in decision-making and resource allocation.
5. Difficulty in Measuring Future Value: HRA is typically focused on the past
and present value of human resources, which can make it difficult to measure
the potential future value of those resources.