Purpose – The purpose of this paper is to examine the externalities in social environmental accounting. Design/methodology/approach – The paper is based on the fundamental research that is related to inductive accounting theory and uses scientific methods for identification of theoretical and practical difficulties of recognizing the externalities in social environmental accounting. Findings – The main finding of the paper is that the information portfolio for the assessment of the externalities will contribute to the accurate estimation of the accounting offer and to the objective judgment of the requested information of this kind within the global performance management. This feat will allow construction of a pertinent informational base concerning the externalities, for integration of the external social costs into the conventional accounting model with a view to smoothly substantiating the socioeconomic and environmental policies. Practical implications – This paper focuses on designing a social arrangement that, in the presence of externalities, can offer an optimal allocation of resources and thus a maximization of welfare for Romanian companies. Originality/value – The paper helps put the organization in a stronger competitive position in relation to firms that apply only conventional accounting and is not extensively and creatively in using the outcomes of expanding social environmental accounting in its decision making.

In this chapter we offer an overview of sustainability reporting practices in Central and Eastern Europe, and we indicate relevant avenues for future research. This region is characterized by the coexistence of Western-based formal institutions and remnants of the communist past. We discuss the role of the context in advancing or inhibiting sustainability reporting practices by mobilizing prior research on the region. Moreover, we examine the implementation of sustainability reporting at the organizational level, including the role of various professional groups in orchestrating reporting and the channels of communication.