CSR-based accounting implementation of Thai-listed firms.

• Author: Waenkaeo, Kulchaya

1. INTRODUCTION

Recently, more attention has been paid to the responsibility of accounting profession. Many research agued that the accounting profession lacks responsibility on stakeholders, social and community such as economic crisis, e.g. in the case of Enron and Word Com Act. The classical crisis from Enron reverberates the world in 2002. The impacts of U.S. the Sarbanes--Oxley Act are imposed on U.S. market capital. The keys of SOX are the firm must concern with corporate governance, operation transparency intention. Thus, the member of Organization for Economic Co-operation and Development: OECD must attend to the role of responsibility on activity of the firm. Besides, Thai-listed firms are required by corporate social responsibility (CSR) to be concerned with social and community. Pervious research, study CSR in only context in disclosure such as Ratanaiongkol and Low (2006) study corporate social reporting in Thailand The news is all good and increasing as result find that increasing amounts of cooperate social disclosure specify human capital resource are primary intention. But, still little research CSR--Based Accounting implementation on the Thai Listed firms.

Many researches provide to advance that the reason for the failure in accounting profession is due to the lack of responsibility to social, community and stakeholder (Gordon, 1998). Neal and Cochran (2008) agued that there are market forces at work which reinforce good CSR behavior in the CSR principle related to the moral and ethical of organization behavior (Callor, 1991). Therefore, the role of accounting profession is to pay attention to the ethical (Gao, 2009) in order to build reliability and credibility for stakeholders. Thus, in the context of CSR-Based, accounting implementation is referring to the procedural of accounting practice related to mandatory responsibility, elementary responsibility, ethical component and voluntary reasonability. CSR- Based accounting implementation is associated with the outcomes of firm (reasonable accounting practice, human capital awareness, social requirement concern and corporate reputation). Therefore, the main objectives of this study are as follows: (1) to empirically examine the CSR--Based accounting implementation and corporate reputation, (2) to study the mediating effect of reasonable accounting practice, human capital awareness and social requirement concerns in the CSR- Based accounting implementation and corporate reputation, (3) to test moderator effect of corporate communications in the corporate reputation, reasonable accounting practice, human capital awareness and social requirement concerns on corporate reputation.

Therefore, the key research question is how CSR--based accounting implementation have an impact on corporate reputation. Moreover, the specific research questions are (1) how does CSR-Based accounting implementation impact reasonable accounting practice, human capital awareness and social requirement concerns?, (2) how does the business citizenship moderate the relationship among CSR--based accounting implementation reasonable accounting practice, human capital awareness and social requirements concerns?, and (3) how do the corporate communications moderate the relationship among reasonable accounting practice, human capital awareness and social requirement concerns and corporate reputation?

2. THEORITICAL FOUNDATION

This study integrates theories in order to describe the relationship of conceptual model, consisting of three theories; resource--based view theory, legitimacy theory, and institutional theory. The resource-based view theory explains how the intangible assets were managed to gain competitive advantage especially, capability, skill and commitment of employees. This study attempts to link the relationship of human capital awareness to corporate reputation (Branoco and Rodrigues, 2006).

The legitimacy theory describes that the firm wishes the social responsibility activity and disclosure by reference to the values, norms, customer and attitudes of wider society in which firm operates (Hibbitt, 2004). Brancoand and Reodringues (2008), and Jenkins and Yakovleva 2006) applied legitimacy theory to describe the CSR disclosure.

3. LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT

According to the literature review, the corporate social responsibility has an influence to increase on the role of accounting. The primary Carroll (1991) suggests "The pyramid of corporate social responsibility: toward the moral management of organization stakeholders" which they refer to a four-part conceptualization of CSR to include the idea that the corporation has not only economic and legal obligations but also ethical and discretionary (philanthropic). Various prior researched in accounting adopted CSR to accounting information disclosure. In this study, the CSR--based accounting implementation is defined as the procedure accounting practices based on the CSR principle separated in four dimensions as following; (1) mandatory responsibility (2) elementary responsibility (3) ethical components and the (4) voluntary responsibility. This study presents the conceptual model as shown in Figure 1.

3.1 Mandatory responsibility

Based on the CSR principle, previous research demonstrates that legal responsibility is related with the important of government and law that complies with various federal, state, and local restorations, law-abiding corporate citizen, legal obligations and legal requirement (Carroll, 1991). LaPorta (2004) indicates that law can be mandatory disclosure of particular information; law can specify liability standard, reduce uncertainty and provide benefit stock market. In this study, the mandatory responsibility is defined as the accounting practice based on government and law, regulations, accounting standard, and market capital requirement. The main role of accenting is the process in collection and analysis of data and provides accenting information to users. Thus, separating two type of accounting practice is mandatory and voluntary. The firms provide information accounting to external use in order to reflect reliability the financial and non--financial information. Thus, hypotheses are proposed following;

Hypothesis 1a: The higher the mandatory responsibility is, the more likely that the firm will have greater reasonable accounting practices.

Hypothesis 2a: The higher the mandatory responsibility is, the more likely that the firm will have greater human capital awareness.

Hypothesis 3a: The higher the mandatory responsibility is, the more likely that the firm will have greater social requirement concerns.

3.2 Elementary responsibility

Based on CSR principle, accounting implementation elementary responsibility refers to the accounting practice based on the importance of maximizing earning per share, being as profitable, level of operation efficiency and important a successful of the firm (Carroll, 1991). Accounting practices provide potential of information by elementary orientation that responds to primary requirement of owner, stakeholder follow appropriate. Thus, the hypotheses are proposed as follows;

Hypothesis 1b: The higher the elementary responsibility is, the more likely that the firm will have greater reasonable accounting practices.

Hypothesis 2b: The higher the elementary responsibility is, the more likely that the firm will have greater human capital awareness.

Hypothesis 3b: The higher the elementary responsibility is, the more likely that the firm will have greater social requirement concerns.

3.3 Ethical components

Ethical components are defined as the accounting practice following the Code of conduct. The role of accounting should concern about rule--based and accounting principle--based in order to respond on investor's protection and stakeholders (Satava, Caldwell and Richards, 2006). Moreover, the initial accounting practices aims to provide accounting information to investors, stakeholder, and creditors. The accounting information can be useful for decision making, evaluating of firm and accuracy in forecast economic. In addition, Hosmer, (1994) suggests ten ethical perspectives in order for accounting and auditing application to practices. These, related with virtuousness, integrity, justice act. The prior research provides evidence that lacking of ethics by misstatement has an impact on economic, stakeholder, and others, for example in the case of Enron (Satava et al., 2006). Thus, the hypotheses are proposed as follows:

Hypothesis 1c: The higher the ethical components are, the more likely that the firm will have greater reasonable accounting practices.

Hypothesis 2c: The higher the ethical components are, the more likely that the firm will have greater Human capital awareness.

Hypothesis 3c: The higher the ethical components are, the more likely that the firm will have greater social requirement concerns.

3.4 Voluntary responsibility

Based on CSR principle accounting implementation...