Abstract
This study is on effects of environmental accounting and reporting on corporate performance. The total population for the study is 200 staff of Agip oil and gas portharcourt, Rivers state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made human resource managers, administrative staff, senior officers and junior officers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
CHAPTER ONE
INTRODUCTION
- Background of the study
Earth environment is a rich heritage handed over to us by previous generations. The present civilization has involved us in varied activities. Many of these activities generated waste wit h potential constituents. The ultimate disposal of the waste lead to environmental pollution in many parts of the world, the magnitude of pollution of the environment has already reached an alarming level (Pramanil, Shiland Das, 2007). During the fifties and sixties of the 19th century people all over the world become more concerned about the quality of their environment. Well known environmental tragedies, like the cause of mercury poisoning in mania mate (Japan), severe smoke pollution episode in London and massive oil spill caused by TERRY CANYON accident reinforced in people’s mind the sense that the quality of air, water and a wide range of natural resources was being seriously degraded. The awareness of the environment and man’s ability to cause damage started from the fifties of the 19th century. This concern had been repeatedly expressed in a series of international summits and consensus right from the sixties. The starting point that composed an organized through proves a large scale the celebrated public action of the club of Rome entitled “Limit to Growth that initiated a worldwide debate of economic growth at the expense of natural environment (Shiland, 22005). Between 1968 and 1972, two international conference were held to assess the problems of the global environment and more importantly, to suggest corrective action. The world conference held in stocking on global environment and more importantly to suggest corrective actions. The aim of the conference was to create a basis for comprehensive consideration with the United Nation of the problem of human environment and to focus the attention of the governments and public opinion to various countries on the importance of the problem (Touche, 1996). In recent years, the adverse environmental effect of economic development has become a matter of great public concern all over the world. Gradually environment is becoming a much more urgent economic, social and political problem. Accountants, ass the basic custodian and light bearer of economic development can no longer shut their eyes to the effect of environmental issues on business management, accounting, audit and disclosure system. Protection of environment and the potential involvement of accountant is becoming a common subject of discussion among the accountant all over the world. Now-a-days, accountants are expected to take a proactive role in the environmental protection process with the advent of liberalization, remove of trade barriers makes it logical that the costs of environmental degradation due to industrial activities should be internalized in corporate account to the extent possible, that is why environmental accounting and reporting therefore is of paramount importance today.
- STATEMENT OF THE PROBLEM
Environment accounting involves the identification, measurement and allocation of environmental costs, and the integration of these costs into business and encompasses the way of communicating such information to companies’ stakeholders. In this sense, it is a comprehensive approach to ensure good corporate governance that includes transparency in its societal activities. The unserious attitudes of several forms not take environmental accounting into consideration makes performance below expectation. This is because environmental accounting helps the form to record all environmental costs incurred by the business thereby finding a way of reducing the cost (environmental expenses) so that the business can increase profit. Also environmental accounting helps from to disclose to the outside world their ability to be environmental friendly. According to Pramanik, Shil and Das (2007), some of the specific issues (problems) regarding the environmental accounting and reporting include:
– Identification of environmental cost and expenses
– Capitalization of cost
– Identification of environmental liabilities
– Measurement of liabilities
At present, no accounting standard has been issued for accounting treatment of these specific problems. Some guidelines regarding these issues have been issued by many organization such as international chamber of commerce, the Japanese Industry Association, the chemical manufacturing association, inter-governmental working group of expert on intimation standards of accounting and reporting. As regard environmental reporting, different organizations have also issued guidelines. But these guidelines are only advisory in nature and not mandatory. Consequently, the researcher interest is therefore to investigate if companies in Niger Delta Region of Nigeria practice environmental accounting and if so how this affects the profitability of their companies.
- OBJECTIVE OF THE STUDY
The objectives of the study are as follows:
- To ascertain how environmental costs influence the profitability of firms in Niger Delta Region of profitability of firms in Niger Delta Region of Nigeria.
- To identify those environmental liabilities associated with firms operations in the Niger Delta Region of Nigeria.
- To identify the effect of environmental disclosures on firms profitability.
- To determine how form’s size affects its voluntary disclosure of environmental information.
1.4 RESEARCH HYPOTHESES
For the successful completion of the study, the following research hypotheses were formulated by the researcher;
H0: Environmental cost does not significantly influence firm’s profitability
H1: Environmental cost significantly influence firm’s profitability
H02: The voluntary disclosure of environmental information in the annual report is not positively related to firm’s size.
H2: The voluntary disclosure of environmental information in the annual report is positively related to firm’s size.
- SIGNIFICANCE STUDY OF THE STUDY
This study will give a clear insight on effects of environmental accounting and reporting on corporate performance. The study will be beneficial to students, organization and the general public. It will also serve as a reference to other researchers that will embark on this topic
- SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers effects of environmental accounting and reporting on corporate performance. The researcher encounters some constrain which limited the scope of the study;
- a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
- b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
- c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.
1.7 DEFINITION OF TERMS
ENVIRONMENTAL ACCOUNTING: Environmental accounting is a field that identifies resource use, measures and communicates costs of a company’s or national economic impact on the environment.
REPORTING: Reporting may refer to any activity that leads to reports in particular business reporting · Data reporting · Sustainability reporting
CORPORATE PERFORMANCE: Corporate performance is a composite assessment of how well an organization executes on its most important parameters, typically financial, market and shareholder performance.
