Environmental Accounting: an Environmental Impact Assessment of Business Organizations (a Case Study of Mtn and Chevron Nigeria Plc).
CHAPTER ONE
Objectives of the Study
- The objectives of the study are stated as follows: To
- Discuss the principles and theories of environmental accounting.
- Investigate the causes of population in the Nigerian industries
- Assess the impact of the social responsibilities of the Nigerian oil companies on its operating environment.
- Help businesses understand the full range of environmental costs they incur and how to incorporate these costs into their decision making.
- Proffer possible solutions on how efficiently and effectively to properly manage our environment.
CHAPTER TWO
LITERATURE REVIEW
Environmental Accounting as a Conceptual Analysis
Environmental Accounting is an emerging and dynamic field. It is a fruitful attempt to identify and bring to the light the resources exhausted and cost rendered reciprocally systems and reports. In other words, Environmental Accounting is defined as a system that attempts to make the best possible quantitative assessment (in terms of either monetary or physical units) of the costs and benefits to an enterprise due to the environmental preservation activities that if undertaken (Pramanik, Shil and Das 2007: 18).
Broadly, Environmental Accounting involves the identification, measurement and allocation of environmental costs, the integration of these costs into business, identifying environmental liabilities, if any, and .finally communicating this information to the company’s stakeholders as a part of general purpose financial statements.
Bartolomeo et al (2000:31) also stated that Environmental Accounting provides reports for both internal uses, generating environmental; information to help make management decisions on pricing, controlling overhead and capital budgetary, and external use, disclosing environmental information of interest to the public and to the financial community. Internal use is better termed environmental management accounting (Bartolomeo et al, 2000). It is noteworthy that the impact of business activity on the environment can be found in several forms (Yakhou and Dorweiler, 2004:66).
Media: Air, water, underground pollution.
Target, drinking water, land and habitat for endangered and threatened species.
Global sites: oceans, atmosphere land mass.
An array of pollution including toxic, hazardous and ‘warming’ is accountable to business activities. From this range of environmental impacts, multiple disciplines are needed for analysis of effects, and for integration into management decisions and accounting reporting (Yakhou and Dorweiler, 2004).
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
Chapter two of this study explained deeper the whole study, conceptual analysis of environmental accounting, its scope, limitations, problems, and its benefits. The present chapter will specify the study population, sample and sampling techniques, the data collecting instrument and the procedures for collecting and analyzing data in order to answer the research questions.
CHAPTER FOUR
PRESENTATION AND ANALYSIS OF DATA
Introduction
The previous chapter laid the foundation of this chapter, by stating out the means, in which the questionnaire to be used for presentation would be administered. This chapter focuses on the presentation of the data’s collected from the administered questionnaires, and the test of hypotheses.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Preamble
Chapter four made the presentations of data’s collected from the administered questionnaire, analyzed it, and decisions were made on the hypotheses tested. This chapter is includes the summary, conclusion and also giving recommendations based on the research work.
Summary
Chapter one of the study, definitions of environmental accounting and its conceptual framework were given to shed light on what it actually means. Its scope, objectives, benefits, limitation and also the various forms of environmental accounting. Gray, Bebbington and Walter (1993) said that environmental accounting can be taken as covering all areas of accounting that may be affected by the business response to environmental issues, including new areas of econ-accounting.
Chapter two began with the conceptual analysis of environmental accounting, its scope, the various forms, objectives, functions, benefits, problems and limitations were adequately discussed. It also looked at environmental auditing which encourages greater transparency and informed decisions about the application of resources and the impact of activities on environmental outcomes without distorting existing accounting standards. Also, the concept of Corporate Social Responsibility (CSR) which represents the contribution that companies make in areas where they interact with wider society in the framework of their business activities.
Demonstrating CSR can benefit a business and form part of its strategic orientation in areas such as safeguarding innovative capacity, improving risk management and strengthening marketing position. Also, the inclusion of corporate responsibility information into the annual financial statements would broaden the scope of users of accounting information.
Conclusion
Environmental accounting is in its preliminary stage and whatever shows in the accounts in this regard is more or less compliance of relevant rules and regulation in the Act. Actually, unless common people are not made aware towards environmental safety, development of accounting in this regard is a little bit doubtful.
It is the call of the time that corporate prepares a firm environmental policy, take steps for pollution control, comply with the related rules and regulations, and mention adequate details of environmental aspects in the annual statements. For sustainable development of country, a well-defined environmental policy as well as proper follow up and proper accounting procedure is a must.
Recommendations
Environmental Accounting will remain as compliance of applicable rules and regulations unless it is not planned and approved from top to bottom. To make environmental accounting an integral part of the overall accounting system of corporate level, the following outlines are suggested:
- Study the various acts applicable to the company, analyses the rules and regulations regarding environment applicable to the company.
- Briefly analyses the requirement of various laws regarding environmental issue.
- Also analyses the various impacts on environment due to the working of organization.
- Preparation of short term as well as long-term environmental budget for both revenue and capital nature.
- Prepare list of various elements causing for pollution of various types and show what types of action have been taken for control over the same. This type of statement should be an integral part of annual accounts.
- A separate statement should be prepared showing investment in the various equipment for pollution control along with benefits to the environment from such equipment. Such a benefit should be measured either in quantity or money.
- The financial or operational effect of environmental protection measures on the capital expenditures and earnings of the enterprise for the current period and any specific impact on future periods.
- When material, the actual amount charged to operations in the current period, together with a description of the environmental measures to which they relate. This amount might be sub-divided with the following general ledger accounts:
- Liquid effluent treatment.
- Waste gas and air treatment.
- Analysis, control and compliance.
- Solid waste treatment.
- Recycling.
- Remediation.
- Others (for example – accidents, safety, etc.)
(ix) In case where it is not possible to segregate the amount that relates to environmental protection measures, this fact should be stated.
(x) When material, the actual amount capitalized to date, and the period for amortization, or writing off such amounts, together with a description of the environmental measures to which they relate. This amount might be subdivided into categories. In case where it is not possible to segregate the amount that relates to environmental measures, this fact should be stated.
Contingent liabilities arise due to environmental related issue should be shown clearly either in the descriptive manner or quantitative manner or both.
(xi) Environmental Accounting should be accounting. Therefore, environmental information system should be developed.
(xii) Environmental responsibility centers should be decided so that actions can be taken against defaulter managers if there is deviation from standard pollution limits.
Finally, it is suggested that management should follow the policy of “Prevention is better than cure”.
Suggestions for Further Study
This study is written in scope and depth. It focused on environmental accounting and its impact assessment n business organization. A lot more work need to be done to diversify this study. Further research studies could be carried out on the topic.
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