Social impact reporting in the public interest: the case of accounting standardisationpresents findings from interviews with charities, impact investors, foundations and regulators. The authors argue that standard-setters should consider a “common good” approach to social impact standard setting.

Research brief: Social impact standards in the public interest

Early in my Ph.D. journey, I attended a conference for accounting researchers which included a two-day event for “emerging scholars” (a kind way of saying “not yet all that good at research’’). There I met Sara Adams, an Australian PhD student who presented a research paper on social impact standards. We were the only two students there working on social impact. That, and the fact that she is awesome, made me decide to hang out with her for the rest of the conference (or as much as my introvert-self can hang out with anyone). That was about 10 years ago. We are no longer “emerging scholars”. This research paper that Sara co-authored with two other scholars is both excellent (published in a top-ranked journal) and relevant to the Common Approach and standard-setting work in Canada. This is my summary of “Social impact reporting in the public interest: the case of accounting standardisation,” Adams, S., Tweedie, D., & Muir, K. (2020).

Key takeaway: Standard setters, and those that advocate for standards, often turn to aggregative and processual notions of public interest. Unless a common good notion is also considered, the diversity and values of the charity sector may be diminished by the creation of standards.

Literature Review: What does published research say about “Public Interest”

“Public interest” is a term used by standard setters. As noted in the paper, “While it is widely agreed that accountants and accounting ought to serve the public interest (Baker, 2005; Sikka et al.,1989), what this means is unclear and contested” (p 394). The authors pick three concepts of the public interest that are most relevant to social impact standards.

1. Aggregative: This conception sees public interest as the sum of private interests and can be calculated using utility maximization and cost-benefit models. “Aggregative models of the public interest invoke a view of society as comprised of isolated, self-interested individuals, with no intrinsic concern for a wider public beyond their own utility” (p 395). The aggregative model is closely aligned with neo-classical economics. It is closely associated with the notion that the role of the standard setter “is to facilitate the smooth operation of markets or to create and sustain quasi-markets in areas – like natural monopolies or public goods – where markets do not naturally arise” (p. 395).

2. Processual: This conception sees “public interest as a process of managing conflicting views and interests” (p 395), based on the idea that “there is no public to possess a single interest, only groups possessing diverse interests” (p. 395; this is a direct quote from Dellaporas & Davenport, 2009 p 1085). Whereas the aggregative concept imagines that public interest can be calculated, the processual model does not. Instead, the processual model focuses on a fair procedure for hearing and adjudicating among interests. “From this view, individuals should be engaged in a dialogue about their interests and how public policy can meet them” (p. 395). The role of the standard-setter is to “ensure the procedure of managing conflicting interests runs smoothly” and to provide “the concepts and measures a smooth process requires” (p 396).

3. Common good: This conception of public interests “equates the public interest with a common good” (p 396, emphasis in original). This approach argues that “the public “whole” has interest beyond its constitutive individual “(p 396). For example, it can include relationships between groups. It notes that ways of flourishing often depend on relationships. Further, this approach “includes commitments to shared norms or values beyond due process alone” (p 396). This commitment to shared norms and values necessitates sensitivity to a specific community’s “local context” (p. 397, emphasis in original). The shared norms and values become known not through calculation or revealed preferences but through “dialogue with community members” (p 397 emphasis in original). Under this conception, the role of the standard setter is to “sustain shared ideals and relationships, which markets may or may not advance” (p 396) and specifically through “more direct and embodied engagements with particular people in the communities they inhabit and sustain” (p 397, emphasis in original).

Method: Interviews with practitioners asking their views on social impact standards

The authors interviewed 36 professionals who deal with social impact accounts as part of their work. Among the 36 respondents are CEOs, CFOs and managers of large and small charities; CEOs of several impact and social investment firms, CEOs and managers at philanthropic foundations, government regulators, evaluators and one front-line worker. The semi-structured interviews “commenced with a general discussion about social impact reporting, including a discussion of organizational practices with social impact reporting, the objective, user and nature of social impact accounts, and views and perceptions of standardisation of social impact reporting. … Questions were framed to ask for positive, neutral and negative perceptions and experiences on standardisation and measuring and accounting for social impact” (p 398).

Findings: How do respondents’ views on social impact standards line up with the different concepts of public interest?

The authors categorized responses according to the three public interest models. The categorization is presented in the box below (taken from Table 2 on p 401 of the article). The authors note that the desired quality in a standard is contested. So for example, some participants stated that “standardised metrics are more rigorous” and several participants suggested that “suggesting standardised metrics are limited or even dangerous. Some argue standardised measures oversimplify the complexity, nuance and context-bound nature of social change” (p. 401). The authors’ overall findings are that “stakeholder views align with the aggregative and processual concepts of public interest. However, this was contested and partial. Accounting standards for social impact reporting will only serve the public interest if they also capture and implement the common good approach” (p 390).

Key themes categorized by public interest


  • Enhanced disclosure standards allow more information to be produced on social impact performance, improving the functioning of the market for funding
  • Standardised metrics allow easier comparisons of performance between organisations, allowing funders to allocate resources to higher-impact organisations
  • Standardised metrics are more rigorous and a more cost-efficient approach to reporting, allowing more resources to be spent on activities to achieve social outcomes rather than reporting
  • Standards can push or force organisations to adopt an outcomes culture, benchmark performance against peers, thereby increasing their performance in achieving outcomes


  • The process of standardisation can be an adjudication of the conflict between charities and powerful resource providers over informational demands
  • The process of standardisation must be participatory, which is supported but not led by accountants

Common good

  • Reporting connects to general principles of transparency, accountability and trust
  • Standards must be sensitive to the common good principles of diversity, local context, creativity and innovation
  • Reporting can be a tool for sharing, learning and collaboration; this common good is risked when standards are too heavily linked to funding

(from Table 2 on p 401)


In their discussion, the authors make three important insights. These insights don’t come directly from the data, nor directly from the prior literature, but from the researchers’ reflections on their data and the prior literature.

1.  Which interests, whose good? Clarifying the public interest in social impact reporting.

  • “[C]harities’ emphasis on the need for accounting standards to respect the diversity of individuals is not reducible to quasi-technical issues of designing accounting standards organisations of different sizes can mobilise. Rather, we can – and arguably should – interpret informants’ emphasis on sector diversity as articulating a value held in common, which paradoxically calls accounting and accountants to recognise the irreducible difference, diversity and specificity of reporting organisations in this domain” (p 411, emphasis added).

2. Trust and transparency are important but different in the different conceptions of public interest.

  • Aggregate: trust and transparency are important because they lead to efficient resource allocation.
  • Common good: trust and transparency are important. Full stop. The data shows that “trust and transparency were valued of themselves, as desirable traits for the charity sector.”

Aside: The authors didn’t mention the processual concept of public interest in this section, but earlier they noted the impotence of a good process, which is one that people trust, which is gained, in part, through transparency.  I would suggest that under the processual concept of public interest trust and transparency are important ingredients in a fair process.

3. Role for standard setters: merchants, umpires or advocates?

  • Merchant: under the aggregate conception of public interest, the standard setter is like an information merchant, helping to generate the data that enables an efficient market.
  • Under the processual conception of public interest, the standard setter is like an umpire, ensuring the negotiation of public interest unfolds according to the rules of discussion.
  • Under the common good concept of public interest, the role of the standard setter is that of an advocate. “the role of an advocate is also to uncover shared interests and goals by exploring with participants themselves the specific goods, needs and interests embedded in local organisational environments and communities” (p 413).Drawing on Spencer (2020), the authors note that the role of the standard setter is different under each of the three concepts of public interest.


Adams, S., Tweedie, D., & Muir, K. (2020). Social impact reporting in the public interest: the case of accounting standardisation. Qualitative Research in Accounting and Management, 18(3), 390–416.

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Published Sept 22, 2022

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