Social Accounting: When Numbers Meet Humanity in Business

ABSTRACT This study investigates whether social accounting, operationalized as disclosed corporate social responsibility (CSR) investment, serves as a form of corporate accountability rather than a means to achieve short‐term profits among Indonesian listed companies and state‐owned enterprises. Using 4417 firm‐year observations from 631 companies—197 listed and 434 state‐owned—spanning 2012 to 2021, the research tests direct and mediated one‐year lagged pathways through partial least squares path modeling. Poverty and social vulnerability are chosen as key social outcomes because they indicate whether CSR initiatives reach local conditions that social accounting aims to address. Partial least squares is applied here as a predictive framework to estimate linked accountability and profitability equations concurrently across both types of firms. The findings reveal a consistent pattern: among listed companies, higher CSR investment correlates with reduced social vulnerability in the following year, with a moderate effect size, while the connection to poverty is less pronounced. In contrast, the social pathways in state‐owned enterprises remain weak. For both groups, changes in profitability are largely disconnected from CSR investment and the social indicators. This study contributes by distinguishing social accountability from instrumental profit motives, emphasizing the stakeholder theory distinction between listed firms and state‐owned enterprises, and translating these insights into a targeted local reporting and disclosure routine. Because the data is drawn from a developing country context and involves firms with relatively complete reporting, caution is advised when applying these findings elsewhere.