Conventional accounting may non be suited for environment and societal applications. When company’s economic benefits are at odds with environmental and societal benefits. conventional accounting dressed ores merely on the enterprises’ benefits and does non pay attending to the natural environment and human society. ( Hooper et Al. . 2008 ) . Conventional accounting simply presents the information about enterprise’s fiscal place and public presentation so as to run into the aim of stockholders and investors. Such attack does non fulfill other stakeholders’ involvements and information demands ( Dana. 2008 ) .
Conventional accounting frequently treats the environmental impacts from concern activities as outwardnesss. such as the pollution of industrial emanations. It will non unwrap the information about environmental amendss and societal costs of pollution. merely if the environmental impacts lead to punishments or the cost of killing ( Stefan and Roger. 2000 ) .
In order to better enterprise’s profitableness. conventional accounting suggests directors to utilize machinery or engineering alternatively of labour force. which consequence in some negative impacts on society. High unemployment frequently causes a lessening in quality of life and a rise of offense rate. and besides may convey about interpersonal struggles in company ( John. 2009 ) . Conventional accounting normally ignores these costs of unemployment in the history of company.
However. conventional accounting may be applicable to environmental and societal issues. when the costs of concern activities are redefined by incorporating their environmental and societal costs. Such as the activities’ costs is to the endeavor alternatively of environment or society. This reclassification can assist enterprises to diminish the costs of environment and society and therefore better enterprises’ environmental and societal public presentation.