• 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. 'Historic cost accounting is the worst possible accounting convention, until one considers the alternatives.'

    Despite of this, there were also many who supported historical cost accounting. Following the falling inflation since mid-1980, accounting standard-setters throughout the world have switched away from issues associated with accounting in times of rising prices. This phenomenon can be explained by considering the advantages of historical cost accounting and the limitations of its alternatives.

  2. The purpose of this report is to explain the legal and regulatory influences on ...

    As part of this process, the cost of unsold or unconsumed stocks is-to the extent that it is believed to be recoverable-carried forward until the period in which the stock is sold or consumed. Stock valuing methods FIFO, LIFO and AVLO (See appendix D)

  1. Accounting Concepts and Conventions

    We have to take into consideration that this asset may have no operational use outside the business and in a forced sale, the value would only be at maximum a quarter of what it is worth. Applying the Going Concern Concept, it might be argued that the asset is over

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

    and are repayable over a period of time, usually between 6 months and 10 years. Lenders charge interest, which can either be fixed or variable, on the amount borrowed. This interest charge is expressed as an APR (annual percentage rate).

  1. The Purpose of Keeping Accurate Accounts

    In forming their opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. The FRSSE In December 1996 the ASB published and Exposure Draft of the Financial Reporting Standard for smaller entities. (FRSSE) this was published in its final form in November 1997.

  2. Complete Report on Askari Commercial Bank

    supplier / vendor, which appear or may appear to compromise commercial or business relationship. * Employees must remain alert and vigilant with respect to frauds, thefts or illegal activities committed within the Bank premises. Inspiring Relationships Inspiring 600,000 relationships: Knowing our customers and their needs is the key to our business success.

  1. Financial Analysis of Matalan PLC

    Also the length of time they choose to depreciate fixtures and fittings, motor vehicles and freehold buildings was there own choice which is in line with FRS 15. This is an arbitrary method and also a subjective one as there is no real way of telling the life-span of buildings or motor vehicles for example.

  2. International reporting Standards.

    It is widely believed that to compete with the capital markets of the U.S. and U.K., Europe has to establish an integrated Pan-European financial and capital marketplace. In doing so it must first make it easier to compare companies financial statements and therefore gaining a true and accurate account of each company's performance (Wilson, 2002).

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