Financial accounting for the common good – from a social economy perspective

This thesis is a pragmatic exploration of concepts to be found in social economy organisations with a view to improving the connection between financial accounting practice and organisational impact in the social and physical world. It approaches financial accounting from a social economy perspective. The research draws on ideas from Aristotle, contrasting the pursuit of wealth for its own sake – chrematistics – with the pursuit of the wise allocation of resources towards a good society in which people can flourish – economics. It also uses Kantian concepts of creative agency and experience as essentially limited and emergent, to discuss the inevitability of diverse views of flourishing. The study develops through three stages. First, there is a qualitative case study exploration of ideas of purpose found in a range of social enterprises. Second, there is analysis of the findings using theories drawn from development studies and sociology. Third, there is a discussion of the implications for current practice in accounting for financial resources, specifically contrasting not for profit accounting with for profit accounting. The findings suggest that the social economy accommodates myriad possible purposes, both macro and micro, within and between organisations, with the organisational macro purpose acting as the internal orchestrator of other priorities. Our current not for profit formats and systems for financial accounting, if understood in non-philanthropic, multiple macro and micro purposes terminology, provide a starting point for the development of financial accounting as a tool for Aristotelian economics; for the allocation of resources to meet diverse needs and interests. The study contributes to critical accounting research, particularly the strand focused on flourishing, from the perspective of the social economy. It shows that the multiple purposes approach, by accommodating choice of organisational macro purpose, can encompass profit as a macro purpose but the for profit approach is too narrow to accommodate any other purpose. It demonstrates that we already have in practice a broader, more flexible way of accounting for financial resources than for profit accounting, and suggests that this approach should be recognized and further developed.