There are a number of reasons why the practice of financial accounting tends to ignore the social and environmental impacts caused by organisations. In this regard, explain: 1. how and why the way we define assets and expenses tends to exclude the recognition of social and environmental impacts; 2. why the 'entity principle' is inconsistent with the principle of sustainable development; 3. why the recognition criteria for the elements of accounting can lead to organisations not recognising environment-related obligations and associated costs; 4. why periodic (12-month) reporting can act to discourage a business organisation from taking a longer-term view of its operations

Question 3 On the 'function' of accounting, Gray (2013, p. 467) makes the following comment in relation to the role of accounting: A world in which the larger organisations disclosed such things as eco-balances and ecological footprints; in which the interactions in all relationships between organisations and stakeholders were exposed, warts and all; when society could know the full extent of an organisation's compliance with law and quasi law; would be unlikely to look a great deal like the world we now inhabit. This, I suggest, is the function of social, environmental and sustainability accountingor, as I prefer to call it, 'accounting'. REQUIRED Explain and evaluate the above comment