By Michael Gibbins and Bradley Pomeroy

School of Business, University of Alberta

Edmonton, Canada T6G 2R6

;

pomeroy@ualberta.ca

May 2007

This is a version for members of FEI Canada and others who may be interested of the paper

“Beyond-GAAP Corporate Reporting: Quality, Value and Relationship to GAAP,” which is now

under revision. The current version of the latter paper may be obtained from the authors. Thanks

to the CFOs who participated in focus groups and individual discussions in early 2006 and to

many others who provided advice, to the Canadian Institute of Chartered Accountants for

financial support, and to the Canadian Financial Executives Research Foundation for support and

encouragement. Comments from colleagues at the University of Alberta and attendees at the

2006 Research Camp of the Australian Graduate School of Management and the 2006 MPAcc

Research Conference of the University of Saskatchewan are also appreciated.

The paper focuses on the increasingly important array of corporate reporting in addition to that in

the audited GAAP financial statements. Using views of CFOs and a study of existing academic

research, the paper explores numerous issues regarding this reporting beyond GAAP. There are

many connections between GAAP reporting and beyond-GAAP vehicles such as the MD&A,

earnings announcements, conference calls and material change reports, so while the paper

distinguishes the beyond-GAAP reporting in its analysis, the various connections are respected

and form part of the analysis foundation. Following the CFOs’ concerns, which are also present

in the research literature, the paper reviews several main topics: disclosure demand from users

(especially market participants), the relationship between GAAP and beyond-GAAP reporting,

the value of such reporting to the firms producing it, research findings about particular beyond-

GAAP vehicles, and the implications of regulatory intervention.

The research specifically on beyond-GAAP reporting is not yet extensive, so some analysis and

conclusions drawn are based on extrapolations from the more extensive research on GAAP

reporting. The paper draws several conclusions including that the value of beyond-GAAP

reporting comes both from the inability of the GAAP financial statements to satisfy either users’

needs for information or firms’ preference to transmit information relevant to their particular

circumstances, and from firms’ strategies around disclosure. Regulation appears to be helpful

only to a degree and recently increased regulatory scrutiny may be reducing information value to

users as well as motivating firms and their CFOs toward compliance rather than strategy and

value. Some important questions about the nature and value of beyond-GAAP reporting have not

yet been answered by researchers, so this paper also calls for increased study of such questions.

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ABSTRACT

Only in recent years, CSR has been taking its momentum among the business society in

Indonesia. The economic crisis and reformation era have brought up a new spirit of

transparency, democracy, and social awareness. Initiated by multinational companies, now,

more and more companies operating in Indonesia are adopting CSR because they believe it is

the right thing to do. However, its implementation is not always easy due to some external

factors affecting business.

This paper attempts to look at major obstacles of CSR implementation in Indonesia related to

business environment, as well as how leading corporate citizens build good internal values to

address such challenges. Based on the author’s observations in the last few years, and

surveys conducted by various organizations, general analysis was made to provide practical

guidance for CSR practitioners.

Each country within the ASEAN region has its own conditions and challenges, many of them

similar to Indonesia’s situation. Within the spirit of promoting ASEAN integrity, the author

believes that sharing corporations’ knowledge and experiences will allow comparative

references among ASEAN countries in order to address common social/environment issues

through CSR best practices.

The field of corporate social responsibility (CSR) has grown exponentially in the

last decade. Nevertheless, there remains a protracted debate about the legitimacy and

value of corporate responses to CSR concerns. There are different views of the role of the

firm in society and disagreement as to whether wealth maximization should be the sole

goal of a corporation. Using extensive data over a period of five years, this study

explores and tests the sign of the relationship between corporate social responsibility and

financial performance. The dataset includes most of the S&P 500 firms and covers the

years 1996-2000. The relationship is tested by using empirical methods. The results

indicate that the sign of the relationship is positive and statistically significant, supporting

the view that socially responsible corporate performance can be associated with a series

of bottom-line benefits.

SOCIAL ACCOUNTING: A METHOD FOR ASSESSING THE IMPACT OF ENTERPRISE DEVELOPMENT ACTIVITIES?

Chris Pay, Traidcraft Exchange

Opening Summary / Extract

The concept of social accounting is growing in recognition and sophistication. As it becomes one of the foundations of good practice in Corporate Social Responsibility (CSR), interest is growing within large corporations, consultancies and voluntary organisations alike. If larger companies are using a social accounting methodology to assess their social impact, the question sensibly arises as to whether this is something that can be usefully adopted by those seeking to assess the impact of enterprise development activities. Indeed, one of the organisations instrumental in the development of the concept, Traidcraft, is itself concerned with poverty reduction and enterprise development.

This article looks at what social accounting is – where it has come from and it’s present level of development. Alongside this, the relationship of social accounting to other CSR initiatives is considered. Examples of the social accounting methodology being applied in enterprise development contexts are reviewed, before some analysis of the link between social accounting and impact assessment is made.

The conclusion drawn is that social accounting is not a means of, nor an alternative to, impact assessment, but rather a framework methodology into which impact assessment can fit. However, the benefits of the methodology are numerous, including not just an increase in transparency and accountability, but also the development of a focus on organisational learning, the embedding of organisational information systems and the systematic improvement of stakeholder dialogue.

Faktor-Faktor yang Mempengaruhi Pengungkapan Informasi Sosial dalam Laporan Keuangan Tahunan (Studi Empiris pada Perusahaan-Perusahaan yang terdaftar Bursa Efek Jakarta)

Univ. Sanata Dharma Yogya

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