The role of the business in society is changing dramatically. An increasing awareness in our society in recent times is that business managers are made increasingly responsible for consequential social and environmental impact. The large companies once looked upon as the exclusive concern of its owners, is coming to be viewed as an instrument of society.

The engagement process of private sector in this regard is through the practices adopted under Corporate Social Responsibility. However in many cases, it needs to be looked into as, what is the nature of work done. The idea behind CSR is that of redistribution to the society and is therefore meant to be citizen centric. Re-distribution in real terms needs to be measured by the social audit process. However in India, social accountability procedures are not carried out for the CSR programmes in the private sector. But there is a need to carry out audits of these programmes in order to evaluate them.

If an organization has to function effectively, it has to be accountable to the public at large. Social Accounting (as per a report on Social Accounting and Social Responsibility Accounting by S. Ghosh) is the branch of accounting which measures, analyze and record the society and the enterprise itself both in qualitative terms. Social Accounting includes such information disclosed in the annual report viz., Statement on Human Resource Accounting, Statement of Value Added, Report on Foreign Currency transactions revealing balance of payment position and Accounting for various social objectives. Social Accounting is defined by Richard Dobbins and David Fanning as "the measurement and reporting of information concerning the impact of an entity and its activities on society". The objectives of Social Accounting are as follows:

• To identify and measure the net social contributions of an individual firm internally, but also those arising from external factors affecting the different segments of the society.
• To determine whether the individual firm's strategies and practices are consistent with widely shared social principles.
• To make available, in an optimal manner, relevant information about the firm's goals, programmes, performances, use of and contribution to scare resources, etc.

In Social Accounting, two major constituents are social cost and social benefit. Social cost is sacrifice or detriment to society whether economic, internal or external; social costs are the sacrifices of the society for which the business firm is responsible like environment pollution, deficiency due to bankruptcy, depletion and destruction of animal resource, deforestation, monopoly and social losses, production of dangerous products, etc. Social benefit is a compensation made to the society in the form of increase in per capita income, afforestation, development of educational facilities, construction of public roads, protection of natural resources, employment opportunities, etc.

Corporate social performance is usually measured through a social cost-benefit analysis. The various categories of social concern are grouped into four broad items namely community involvement, Human resources stewardship, physically resources and stewardship, product or service contribution. The social accounting process facilitates this assessment and enables the production of social accounts which when audited, can be published as a Social Audit report.