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1. Introduction

Recent years have saw that listed firms, especially the large organisations, voluntarily disclose their Social and Environmental issues in their annual reports. As a result, a question was come up with by researchers: why managers would choose to undertake the voluntary activities?

Although there is no consensus being reached about what perspective theories should be used to explain the Social and Environmental Accounting, and moreover critique voices are from the works of Marx or by the deep-green or feminist literatures (Deegan, 2002), to some extent, systems-oriented theory and Positive Accounting Theory can list some hints.

This
3.1 The Ethical Branch of Stakeholder Theory

Under this normative perspective, all stakeholders have the rights to be treated fairly by the organisations. That is, as Hasnas (1998, P.32) said “firms are not a mechanism for increasing the stockholders’ financial returns, but as a vehicle for coordinating stakeholder interests”.

The broader ethical perspective states that all stakeholders have a right to be informed of the information by the firms about how they are affecting them. With respect of “right to information”, “accountability model” was come up with by Gray, Owen and Adam (1996). As it means by accountability model, reporting should be “responsibility” driven rather than “demand” driven (1996.P. 38). Using the accountability model to explain corporate social reporting, Gray, Owen and Maunders (1991, p. 15) argue that:

“…the role of corporate social reporting is to provide society-at-large (the principle) with information about the extent to which the organisation has met the responsibilities imposed upon it”.

That is, the social reporting is to inform the society about how well the firms have fulfilled the responsibilities.

3.2 The Managerial Branch of Stakeholder Theory

The managerial perspective of stakeholder theory tends to be more “organisation-centred” (Gray, Owen and Adams, 1996). That is, the organisations will pay more attention to the powerful stakeholders, for example,