Incorporating Environmental Accounting for a Greener World, Essays (university) of Accounting

Download Incorporating Environmental Accounting for a Greener World and more Essays (university) Accounting in PDF only on Docsity! Running head: INCORPORATING ENVIORNMENTAL ACCOUNTING FOR A GREENER WORLD Incorporating Environmental Accounting for a Greener World Subject: Accounting, Institute: University of California Abstract: Social accounting can be improved and made more complete by inclusion of environmental accounting. Environmental accounting is assessment of environmental impact of business organization. Environmental accounting helps to inform stakeholders about an organization social impact and measures being taken. Recycling and Waste management are in focus apart from use of Green energy. The costs and benefits of environmental measures being taken by organization are also part of environmental accounting. There is a greater focus on environment and stakeholders are demanding information on environment to take decisions. In such a situation there is a greater need for an environment section in accounting report. This paper analyses the information to be listed in the environment section. Table of Content Introduction .. 6... eee tent nett een eee 4 Literature Review. . 2.1... 6 ee eee eee eee 4 Gap Analysis Problem Statement ...... 6.66. cece e eee e eee teee ee e eee nents 6 Qualitative Analysis... 0... cece eee eee eee 7 Discussion & Conclusion. .... 6.6... e cece ett e ent een eee eee 8 References 0... cee ee nett e ent een tees 9 INCORPORATING ENVIORNMENTAL ACCOUNTING FOR A GREENER WORLD 2 1.1 Introduction Global warming has a become a major issue and it is deemed necessary that accounting is done for environmental impacts of business organization. Environmental accounting can be classified under social accounting. Environmental accounting may not directly impact the balance sheet of any organization, but it may be done for social purposes. Business organizations may want to keep track of its carbon footprints through environmental accounting. There are many methods to do environmental accounting, but no standard accounting procedure is in operation. Some accountants do use NEPA (National Environment Policy Act, 1969) to have environmental impact statements developed. The improvement on impacts listed in EA (environmental assessment) may be audited for implementation of risk mitigation strategies. 1.2 Literature Review @ The focus of environmental accounting is to research the effect that organization has on environment and effect that environment has on organization. These effects may be interpreted in terms of physical and financial units (Schaltegger and Burritt, 2010). Gi) The main purpose of social accounting is to inform stakeholders about organization impact. Environmental accounting may be considered a branch of social accounting. Environmental accounting integrates a business organization with its environment (Eugénio et al., 2010). (iii) — Social accounting helps to keep the organization CSR activities transparent. Including environmental accounting helps to maintain true record of social contribution. (Brown et al., 2006). INCORPORATING ENVIORNMENTAL ACCOUNTING FOR A GREENER WORLD 5 a) Environmental Impact statements (EIS) for different projects. b) Risk mitigation strategies and environmental damage control plans. c) Funds potentially reserved to resolve environmental concerns. d) Implementation of measures recommended in Environmental Assessment (EA) reports. v) The environment section may also include costs of risk mitigation strategies listed in Environmental impact statements (EIS). The Environmental assessment for each project is carried out in accordance to NEPA (National Environment Policy Act) passed in 1969. vi) There are independent organizations which certify organizations which take environmental protection measures. If the company earns any such certification and it help in getting a greater number of tender or projects, then financial outcome may be estimated to be included in the environment section. 1.6 Discussion & Conclusion The need for information on environmental impact of the organization has been growing. Today stakeholders are demanding information to take decision to cut down environmental damage. In such situation it is imperative that accounting reports contain a section on environment. Though such a requirement is not mandatory or obligatory. The information recommended to be listed in the environmental section was discussed in qualitative analysis. The future work on this project may include design of the section and samples done for few organizations. INCORPORATING ENVIORNMENTAL ACCOUNTING FOR A GREENER WORLD 6 This paper aims to increase awareness on the need to have environment section in accounting report. The accounting effort may be deemed to be more complete when the environmental impact of the business is also captured. INCORPORATING ENVIORNMENTAL ACCOUNTING FOR A GREENER WORLD 7 References Schaltegger, S. — Burritt, R. (2000): Contemporary Environmental Accounting, Issues, Concepts and Practice. Greenleaf, Sheffield. Eugénio, T. — Lourenco C. I. — Morais, A. I.(2010): Recent developments in social and environmental accounting research. Social Responsibility Journal. 6(2), pp. 286-305 Mathews, M. R. (1997): Twenty-five years of social and environmental accounting research: Is there a silver jubilee to celebrate? Accounting, Auditing and Accountability Journal. 10(4), pp. 481-531 Brown, D. — Dillard, J.— Marshall, R. S. (2006): Triple Bottom Line: A business metaphor for a social construct. Portland State University, School of Business Administration, Portland Baric, R. — Roth, J. (2006): Kényvviteltan (Accounting). Aula, Budapest Gray, R. (2001): Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt? Business Ethics: A European Review. 10(1), pp. 9-15 Perego, P. (2005): Environmental Management Control, An Empirical Study on the Use of Environmental Performance Measures in Management Control Systems. Ponsen and Looijen BV. Wageningen Milne, M. J. (1996): On Sustainability, The Environment and Management Accounting. Management Accounting Research. 7(1), pp. 135-161