South African Journal of Economic and Management Sciences
On-line version ISSN 1015-8812
YOO, Taeyoung and NAM, Giseok. An expanded accounting framework for sustainable growth: Focus on the relationship between a focal firm and its stakeholders. S. Afr. j. econ. manag. sci. [online]. 2015, vol.18, n.3, pp. 366-379. ISSN 1015-8812. http://dx.doi.org/10.17159/2222-3436/2015/V18N3A6.
In contrast to current accounting principles, which have focused on financial information about the reporting entity, this study suggests that attention should be paid to the information about relationships between a focal firm and its stakeholders. That is, we could more accurately assess the sustainability of a firm's profit and growth by considering both its financial outcomes and business relationships. The rationale of the suggestion is that firms which facilitate mutual profitability between themselves and their stakeholders are more likely to achieve cooperative relationships and consequently enjoy better financial performance and sustainable growth than those who pursue their profitability in an exclusive way. This study therefore suggests that principles of accounting should embrace not only the incomes of a firm and its consolidations (subsidiaries, associates and joint arrangements) but also those of its stakeholders, such as suppliers.
Keywords : principles of accounting; quality of outcomes; quality of information; societal relationships; sustainable growth.