Page 53 - DCOM409_CONTEMPORARY_ACCOUNTING

Contemporary Accounting

Notes 3.2 Objectives of Environmental Accounting

Practical developments of environmental accounting saw tremendous growth in research, with
various initiatives and proposals being put forward by accountancy bodies and related
international organizations. In essence, environmental accounting now plays a vital role in
daily commercial undertakings, attempting to ensure that development is not at odds with
environmental protection. The potential for accountants to make a significant contribution
towards environmental consciousness in organizations has been envisaged through their
managerial, auditing and reporting skills. Increasingly, the emphasis has shifted from social
accounting in general to a more specific environmental accounting. These days, social accounting
has become synonymous with the term Social and Environmental Accounting (SEA), a linkage
that places due emphasis on the importance of environmental issues.

Did u know? What is social reporting?
Social accountability is about being answerable to the people affected by your actions.
The Environmental Accounting was first considered a new field in accounting in during 1998 by
the intergovernmental work group ISAR (United Nations Inter governmental Working Group
of Experts on International Standards of Accounting and Reporting). Jointly with this work,
ISAR has been coordinating efforts with IAPC (International Auditing Practices Committee) to
formalize a group of audit standards for verification of the environmental performance reported
on accounting statements. This work group basically emphasised the need for environmental
accounting to cover the following basic objectives:
assistance of professionals in other fields of knowledge
give the status of the information system of the analyzed company, as regards the
preparation of its internal controls to provide its financial accounting with relevant
information on environmental aspects

effective contribution of various external intervenors, as the consulting specialists,
certification companies and independent auditors, to grant an independent opinion on
specific aspects of the report

Task Discuss the regulatory framework of environmental accounting in India.

Self Assessment

Fill in the blanks:
6. The Environmental Accounting was first considered a new field in accounting in during
…………by the intergovernmental work group ISAR.
7. …………. accountability is about being answerable to the people affected by your actions.

3.3 Observations

The following are the key observations for practice of environmental accounting:
There are, in addition, four main observations regarding how useful environmental accounts
are for policy:
1. Although some countries are using the environmental accounts quite actively, the accounts
are still underutilized, especially in developing countries

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