Professor M. Azizul Islam, recently gave a seminar on limitations to traditional (financial) accounting in a socio-ecological context, to a group of social scientists and ecologists at James Hutton Institute. In his latest blog he discusses the limitations to traditional accounting in a socio-ecological context.
Traditional accounting disregards ecological and environmental impacts of an organisation based on certain assumptions including entity, controllability and measurability assumptions. The present accounting system suggests that each entity is independent and therefore concentrates upon seeking satisfaction for its own wants, without regard to other entities and the environment. Based on socio-ecological perspective, Professor Islam argues that the effect of an organisation’s activities upon externalities is the organisation's concern, and hence a proper concern for accounting; organisations are accordingly accountable for any environmental and ecological impacts on the society in which they operate.
Professor Islam’s presentation has received significant attention to the seminar participants, and many of his interesting insights have been considered as food for thought. Such insights appear to have a wider implication for future accounting teaching and research.
Professor M. Azizul (Aziz) Islam is Chair in Accountancy and the Director of Post Graduate Research (Accounting & Finance) at the University of Aberdeen Business School.
