Environmental Financial Accounting

From a company’s perspective, there seem to be two underlying forces driving company interest in various kinds of environmental performance data that might be considered varieties of accounting. The first is a growing demand from company stakeholders, based on an increased interest in environmental issues. Interested stakeholders are not only the consumers, but also industrial customers, financial institutions and others. For this reason, more and more companies are producing environmental reports, but these are often low on data content, which adversely affects company credibility on environmental issues.environmental financial accounting, environmental management accounting, environmental issues, international accounting standards

The role of environmental accounting in organizational change: An exploration of Spanish companies

Critique originated by earlier theorization of environmental accounting, as a way of building environmentalist visibility of business, led Gray et al., to study environmental accounting in the dynamics of organizational change. They concluded that environmental accounting is being used to ``negotiate the conception of the environment'' by companies that have not significantly changed. In order to investigate whether Gray et al.'s model and conclusions apply to a different cultural context, we have conducted nine case studies in Spain. We found that Spanish organizations are not truly changing their conventional perception of the environment, even in those cases where generalized structural and organizational changes are taking place. Moreover, the use of environmental accounting is coupled with an attempt to negotiate and control the environmental agenda

An industry in crisis : risk, reflexivity, sub-politics and accountability processes in salmon farming

This paper draws upon an arena study on the accounting and accountability processes used within a business sector, under intense public and regulatory scrutiny in terms of its social, economic and ecological risks. Georgakopoulos and Thomson (2004, 2005) report on an absence of environmental accounting within the salmon farming organizations for management planning and control processes. This paper extends this analysis by attempting to theorise the social and environmental accounting observed by these organizations discharging these accountability duties using insights from the risk society literature. The interviews and documentary analysis revealed the existence of an active accountability network. However, Social and Environmental Accounting techniques did not feature in the engagement processes. We observed the existence of fragmented accountability networks, and evidence of a struggle for domination of a techno-scientific accountability process. Within these discourses, business and cost issues were evident, but they were not formally quantified or systematically integrated. We find that the accountability processes observed in our arena study, were consistent with Beck's (and others) analysis of reflexive modernity and the Risk Society Thesis This paper by evaluating accounting and accountability processes within a specific context, demonstrates the importance of locating social and environmental accounting processes within wider accountability discourses. These societal accountability discourses extend beyond social and environmental as well as conventional accounting practices. It is suggested that all accounting practices should become more reflexive in nature if they are to remain relevant in these wider societal accountability discourses

Proposed statement of position : Environmental remediation liabilities (including auditing guidance);Environmental remediation liabilities (including auditing guidance); Exposure draft (American Institute of Certified Public Accountants), 1995, June 30

This Statement of Position (SOP) consists of two Parts: (1) a nonauthoritative discussion of major federal legislation dealing with pollution control (responsibility) laws and environmental remediation (cleanup) laws and the need to consider various individual state and other non-United States government requirements and (2) authoritative guidance on specific accounting issues that are present in the recognition, measurement, display, and disclosure of environmental remediation liabilities. This SOP does not provide guidance on accounting for pollution control costs with respect to current operations or on accounting for costs of future site restoration or closure that are required upon the cessation of operations or sale of facilities. This SOP also does not provide guidance on accounting for environmental remediation actions that are undertaken at the sole discretion of management and that are not induced by the threat of assertion of litigation, a claim, or an assessment. Furthermore, this SOP does not provide guidance on recognizing liabilities of insurance companies for unpaid claims, nor does it address asset impairment issues. The SOP is written in the context of the operations taking place in the United States, however the accounting guidance is applicable to all operations of the reporting entity. This SOP provides: A. That environmental remediation liabilities should be accrued when the criteria of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, are met, and it includes benchmarks to aid in the determination of when environmental remediation liabilities should be recognized in accordance with FASB Statement No. 5. B. That an accrual for environmental liabilities should include — (1) Incremental direct costs of the remediation effort, as defined. (2) Costs of compensation and benefits for employees to the extent an employee is expected to devote time directly to the remediation effort. C. That the measurement of the liability should include— (1) The entity\u27s allocable share of the liability for a specific site. (2) The entity\u27s share of amounts related to the site that will not be paid by other potentially responsible parties or the government. D. That the measurement of the liability should be based on enacted laws and existing regulations, policies, and remediation technology. E. That the measurement of the liability should be based on the reporting entity\u27s estimates of what it will cost to perform all elements of the remediation effort when they are expected to be performed and that the measurement may be discounted to reflect the time value of money if the aggregate amount of the obligation and the amount and timing of cash payments for a site are fixed or reliably determinable. F. Guidance on the display of environmental remediation liabilities in financial statements and on disclosures about environmental-cost-related accounting principles, environmental remediation loss contingencies, and other loss contingency disclosure considerations. The provisions of this SOP are effective for fiscal years beginning after December 15, 1995. Earlier application is encouraged. The effect of initially applying this SOP shall be reported as a change in accounting estimate. Restatement of previously issued financial statements is not permitted.https://egrove.olemiss.edu/aicpa_sop/1609/thumbnail.jp

The Benefits of Improved Environmental Accounting: An Economic Framework to Identify Priorities

Improved environmental accounting is increasingly seen by corporate managers and environmental advocates alike as a necessary complement to improved environmental decision-making within the private sector. This paper develops an economic approach to the evaluation of environmental accounting's benefits and derives the value, and determinants, of improved accounting information in several production and capital budgeting contexts. Using concepts from managerial economics, finance, and organizational theory, the analysis identifies the types of environmental accounting improvement that are most likely to yield significant financial and environmental benefits.

Sustainability management accounting system (SMAS): towards a conceptual design for the manufacturing industry

[Abstract]: The study reported in this paper aims to identify an effective management accounting system using sustainability accounting concept for environmental and social cost measurement to add value to organizations. The motivation for undertaking this research is driven by the current practice of activity based costing (ABC), which has not identified and allocated costs of environment and social impacts to a single production activity. This has resulted in inaccuracies in cost accounting information when preparing environmental and social performance disclosures for internal management decisions, as well as external disclosures. This study therefore develops a conceptual model for a Sustainability Management Accounting System (SMAS) to improve the identification and measurement of environmental and social impact costs. A SMAS also provides sustainable organizations with a way to enhance cost allocation and analysis efficiently, thus creating more accurate cost accounting information for management decisions and reporting disclosure purposes. This paper describes preliminary work undertaken to date. Currently, it would appear that most Australian firms fail to report on their environmental performance, however, social indicators make it increasingly important for organisations to embrace corporate social reponsibility in their financial reporting and disclosure. Further, the results of quantitative data anlaysis will be used to identify an effective management accounting of sustainable organizations while supporting the development of a SMAS conceptual model

ENVIRONMENTAL AUDIT, A POSSIBLE SOURCE OF INFORMATION FOR FINANCIAL AUDITORS

The purpose of this article is to present certain aspects regarding environmental auditand how it is perceived by the accounting profession, especially by financial auditors. The mainobjectives taken into account when writing the article was to define the concept of environmental audit,to present how financial auditors get involved within environmental audit, both internationally and inRomania. The scientific approach is based on information from national literature, European andinternational practice regarding environmental audit and the implication of accounting professionalsin this activity. The results of the research conducted in this paper have shown that the accountingprofession at international level, such as the case of New Zeeland, as well as at national level, is onlyslightly involved in environmental audit due to the fact that this type of audit is an activity that is notmandatory, being used for the entity’s own use as opposed to financial audit, which is mandatory andis stipulated by accounting regulations in force and is standardized.environmental audit, financial audit, environmental aspects, accounting profession

Green Accounting in Romania - a Vision to European Integration

The paper debates solutions, points of view and a commune language for Green Accounting. The main purposes of our research are the following: 1.Define the object of Green Accounting 2.Scope 3.Theory and specific practices 4.Disclosure and financial analysis 5.Romanian experience in Green Accounting. How to define Green Accounting? Is Green Accounting a part of Environmental Accounting? How to ensure the balance between business interests and envinronmental protection? Are environmental goals based on Total Quality Management? How to design for Environment? This are some questions proposed to be discused in this paper.