• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Social and Enviromental Accounting

Extracts from this document...


Social and Environmental Accounting 1. Introduction Accounting forms the most important quantitative system within an enterprise. Information is offered to users in the form of financial reports, which are the final product of the accounting process. The purpose of financial reporting is to communicate financial information to interested parties. It is therefore important that financial reports must be presented in such a way that the relevant information is timeously communicated in a meaningful, comprehensible and useful manner, allowing users to act upon it and to use it to aid effective decision-making. However, environmental reporting embraces a number of quite different concepts and practices, for which different professional disciplines are appropriate. A company may be reporting principally the impact that the business has on the environment; or the impact the environment has on the business. Environmental accounting here is chiefly concerned with the latter (Anon, no date). This paper will focus on the discussion of whether the social and environmental reporting fulfils the objective of accounting. Moreover, it will give an account of how qualitative characteristics are relevant to such reporting. 2. Social and Environmental Accounting When the whole world experiences a rapid growth of industry and economic, unfortunately, the natural environment is terribly damaged at the same time. ...read more.


"The lack of reliable and accepted means of quantifying environmental costs for a company is on longer an excuse for their omission", Price Waterhouse USA 1992. The uncertainties may well require the application of techniques such as sensitivity analysis, simulation etc. Academics and environmentalists are often opposed to the quantification of environmental impacts as they regard the uncertainty and subjectiveness of the measurement process leave the figures with a level of credibility that they do not merit ( McChlery, 2000) 3. The Qualitative Characteristics of Financial Information On the same basis as all accounting systems, environmental accounting presents an objective picture of the present situation and changes in the natural heritage, interactions between the economy and the environment, expenditure on preventive measures, environmental protection and the repair of environmental damage. "Environmental accounting aims at achieving sustainable development, maintaining a favorable relationship with the community, and pursuing effective and efficient environmental conservation activities."(Caves, 1992, p.34) These accounting procedures allow a company or an organization to identify the cost of environmental conservation generated during the normal process of business; identify the benefit gained from such activities. Environmental accounting is aimed to identify, measure and disclose the activities of a company or an organization based on its environmental conservation cost or economic benefit associated from environmental conservation activities and the company's financial performance. ...read more.


For others, the traditional approach is preferred: 'Prudence [as defined by SSAP2] is a mainstay of traditional practice. The Prudence concept creates an essential bias . . . a potent antidote to counteract preparers' eternal optimism.' (Davies and Davies, 1999) 4. Conclusion To achieve sustainable development, there is an increasing pressure from a wide range group of stakeholders including government regulators, media, consumers, investors, employees, competitors and local communities to require the organizations to disclose their performance against environment, society and economy. To meet the need of the stakeholders, social and environmental accounting, a new approach to corporate reporting, has been emerged. However, there is a great challenge for organizations to use it in a regulated and standardized way due to a lot of practical issues. Reference * Anon, 1999. Survey of Environmental reporting. Pension and Investment Research * Anon, no date. What is an environmental report? Bournemouth: Bournemouth University. * Brian A., no date. An introduction to modern financial reporting theory. * Caves, R.E., 1992. Industrial Efficiency in Six Nations. UK: MIT Press * Davies and Davies,1996: 89. * McChlery S., 2000. Accounting for the environment. Leaa article. June 2000 * Price Waterhouse USA: Environmental Costs: Accounting and Disclosure, Price Waterhouse Desktop resources, 1992. * Stikich, R. (1997), Run your own business, Accountancy and Business Journal, Vol. 23, No. 33. UK: Bournemouth University. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Accounting & Finance essays

  1. Accounting Concepts and Conventions

    This method reduces the value by the same amount each year. The method reduces the value of an asset by a fixed percentage (%) each year. This means that depreciation is highest in the early years and lower in the later years.

  2. Complete Report on Askari Commercial Bank

    We are committed to develop and enhance each employee's skills and capabilities through extensive in-house and external training programs and job rotation. The strong employee bank relationship is evidenced by the fact that Askari has a low employee turnover. Most of the top management today, have reached their present positions by growing within the organization.

  1. Financial Analysis of Matalan PLC

    The management of the company is responsible for the financial information and representations contained in the financial statements, notes and all other sections of the annual report. The financial statements have been prepared in conformity with generally accepted accounting principles appropriate under the circumstances to reflect, in all material respects, the substance of events and transactions, which have occurred.

  2. International reporting Standards.

    the principles would apply more broadly than under existing standards, thereby providing few, if any, exceptions to the principles and (2)

  1. International Accounting Standarts

    IAS: 1) In IAS (and US-GAAP)

  2. Harmonisation of accounting standards in Europe

    The Directive cover both public and private companies in all EU countries. In 1978, the EC implemented the 4th Directive on the Format and Rules of Accounting, which harmonised the general layout and content of company financial statements. Although a limited number of national options were permitted, companies registered in

  1. The Purpose of Keeping Accurate Accounts

    the corporate governance statement reflects the company's compliance with the seven provisions of the Combined Code specified by the Financial Services Authority for review by auditors of listed companies, and they report if it does not. The auditors are not required to consider whether the Board's statements on internal control

  2. This report has been produced as evidence for Unit 9 - 'Financial Services' - ...

    Money purchase schemes These are sometimes called a 'defined contribution scheme'. Effectively, you put your money into a form of investment, where it grows, and you eventually draw the proceeds by way of a pension. The great advantage of this type of scheme is its simplicity.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work