The article “The CPA’s role in forming benefit corporations” by Benson, Thomas, and Burton revolves around the benefit corporations and the role CPA plays in their formation and further evolution. Social benefit enterprises can be considered an essential feature of the modern business world as they are focused on the creation of value not only for shareholders but for all stakeholders, including workers, community, and global environment. For this reason, the appearance of such units is essential for the development of socially conscious firms and the expansion of the for-profit motive to make all existing businesses accountable for people and the planet.
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The article assumes that the pivotal aim of benefit corporations is the creation of a material positive impact on communities, and it serves as the main factor that differentiates them from traditional firms. CPAs also play an essential role in their role by consulting clients and helping to choose the best possible formats for their business. At the same time, the work of any benefit corporation presupposes that consideration of the effects of all its actions on the environment and stakeholders, which might demand a specific approach in management and control to accomplish all tasks.
Another critical requirement to the work of benefit corporations is the need for transparency, which presupposes annual reporting its social and environmental performance to evaluate it regarding the existing standards and ensure that the work of a certain business contributes to the generation of a public benefit that can be available or used by all stakeholders. The given task introduces some specific demands to the organization of works and methods that should be utilized by managers as the functioning of these firms differs from the work of traditional companies in many aspects. It also means that setting up a benefit corporation is a multi-stage process that includes several steps and demand CPAs’ assistance to cover all problematic areas and avoid flaws that might deteriorate the outcomes.
In accordance with the article, there are eight steps that can be needed to create the appropriate legal structure and framework that could help to establish a benefit corporation. These activities might presuppose consideration of taxes, consulting with clients and authorities, choice of the state, industry, governance models, and standards that will be followed to align the effective work. The existence of these tasks presupposes the use of specific management control models that provide an opportunity to achieve the high transparency levels and guarantee that the functioning of a unit will be organized in a way that contributes to the achievement of all desired goals.
Altogether, the paper shows that benefit corporations can be considered a new essential element of the modern business world as they are focused on the creation of public good, and that will help all stakeholders to improve their position. The management of firms of this sort presupposes some new approaches and CPAs’ assistance and counseling because of the need for transparency and different accountability models. However, the development of these models is critical for the planet and future society’s evolution.
Benson, S. S., Thomas, P. B., & Burton, E. J. (2018). The CPA’s role in forming benefit corporations. Journal of Accountancy. Published. Web.