Bangladesh Perspective On Environmental Accounting Accounting Essay


Environment has become a important concern in today ‘ s ecological, societal and economical set up. Retention and betterment of the quality of environment is a large issue for the concern universe. The concern houses are hold responsible for guaranting a sustainable environment as their activities exerts tenseness over the environmental construction.

Environmental accounting ( EA ) , more specifically, environmental direction accounting ( EMA ) has emerged during the last two decennaries in response to this issue. Review of available literature and corporate patterns reveal that a scope of different perceptual experience and construct of EMA has been developed. However, late, there has been a motion towards a common apprehension of the term EMA ( Schaltegger and Burrit, 2000 ) . Disclosure of environmental information in corporate one-year studies Begins in the 1970s and it had aggressively expanded in the 1990s ( Kukobo et al, 2002 ) . Before 90 ‘s there were no grounds that public limited companies listed with Dhaka Stoke Exchange ( DSE ) disclosed environmental information in their one-year studies. Evidence was found from Belal ‘s ( 1997 ) survey that merely 6 % publically traded companies made environmental revelation ( Islam, 2002 ) . Since corporate coverage patterns are still non-voluntary for a underdeveloped state like Bangladesh, public consciousness about environmental revelation in corporate coverage remains untasted.

This thesis deals with a really specific aim. It focuses on whether listed companies in Dhaka Stock Exchanges ( DSE ) unwrap environment related information and so we have tried to place some account from the present revelation patterns. For the really ground, we have had a thorough reappraisal of the revelation patterns followed by the listed companies. In this instance we have given importance on descriptive statistics though there are a batch of such surveies like Belal ( 1997, 1999 ) , Imam ( 1999, 2000 ) etc. There are besides a batch of statistically important trial in this country like index evaluation of Wiseman ( 1982 ) that was besides adopted by Cormier and Magnan ( 1999, 2001 ) . Such a method is good for the analysis of an one-year study ( Kokubu et al. , 2002 ) . There are besides many methods to mensurate environmental revelation in footings of the quality of the study ( Grey et al. , 1995 ; Milne and Adler, 1999 and Kokubu et al. , 2002 ) . But, as our companies unwrap no or utilize these advanced statistical tools. minimal information sing environment, we think that the clip has n’t come yet to utilize these advanced statistical tools.

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We have divided our entire treatment into three subdivisions. In the first subdivision, we have tried to specify environ mental accounting to some extent so that our readers have, at least, some theoretical construct over the issue we are speaking about. In the 2nd subdivision, we have developed the hypotheses to be tested and we have tested it on the footing of empirical informations, followed by the logics of the consequences and its deduction in the last subdivision.

Environmental Accounting Defined

EA is a wide term that is used in different contexts with different significances and

application. EMA has a focal point on supplying the direction of an administration with better

information on the existent private environmental costs already being incurred by the entity. Other waies being taken with corporate environmental accounting topographic point greater accent on the external coverage of environmental outgos, and gauging the external environmental costs non recognised by the entity ( external cost accounting ) . With external cost accounting, the appraisal of external costs can be used to find the net income that would stay if a proviso or outgo had been made to reconstruct or avoid the external environmental impacts. EA refers to the incorporation of environmental costs and information into a assortment of accounting patterns. Figure 1 below depicts some of the different contexts in which EA is used. At a macroeconomic degree, EA is used to account for costs associated with a part ‘s stocks and flows of natural resources. EA histories for the flow of renewable and – renewable resources through a part ( natural resource accounting ) or the flow of goods and services through an economic system ( national income accounting ) in such a degree.

At the microeconomic degree, EA can be applied to both fiscal accounting and direction accounting. Fiscal accounting, whereby a house reports its economic activities to an external audience, has demands for revelation of environmental liabilities and certain environmental costs. In footings of direction ( or internal ) accounting, EA is the manner that concerns can account for the stuff usage and environmental costs of their operations. Materials accounting is a agency of debut of tracking stuff flows through a installation in order to qualify inputs and end products for the intents of measuring both resource efficiency and environmental betterment chances.

Environmental Costss Classified

“ Social costs ” are the costs that the society bears due to the inauspicious effects on the environment associated with concern activities and include those to clean contaminated rivers, those associated with harm to humankind and ecosystems from air pollutant emanations, and other costs ; because there is no manner to place who is responsible for these costs. The societal costs are borne by the society as external economic loss, as opposed to the costs usually borne by companies. Since development of strict undertaking on environmental preservation by company ‘s consequences in decrease of societal costs, such tackling should be encouraged. Companies may incur some costs to conserve the environment from being polluted or contaminated as a portion of their societal duty and answerability. Environmental preservation includes the undermentioned activities:

Conservation of the environment from the conditions that cause inauspicious effects on human wellness and the life environment through air pollution, H2O pollution, dirt taint, noise, quiver, land remission, and violative olfactory properties that are generated by concern activities by companies, etc. ( Pollution bar )

Conservation of the environment from the conditions that cause inauspicious effects on the planetary environment overall or over a broad scope through planetary heating, come oning ozone bed depletion, Marine pollution, and biodiversity that are generated by concern activities by companies, etc. ( planetary environmental preservation )

Conservation of the environment by decrease of the usage of chemical stuffs that may foul the environment, control of waste production, reuse of merchandises, publicity of recycling at assorted degrees, and other appropriate waste processing ( resource circulation ) .

Other environmental preservation implemented by companies ( other environmental preservation activities ) . Environmental costs refer to the “ investing sum and disbursal sum for environmental preservation ” by manner of implementing the above mentioned activities. On the footing of outgo, environmental costs are classified into the undermentioned five classs:

Environmental cost for commanding the environmental impacts that are caused within a concern country by production and service activities ( Abbreviated as concern country cost )

Environmental cost for commanding environmental impacts that are caused in the upstream or downstream as a consequence of production and service activities ( Abbreviated as upstream-downstream cost )

Environmental cost in direction activities ( Abbreviated as direction activity cost )

Environmental cost in research and development activities ( Abbreviated as research and development cost ) .

Environmental cost in societal activities ( Abbreviated as societal activity cost ) . Another class is added as a consequence of the cause unrelated to these concern activity countries.

Environmental costs matching to environmental amendss ( Abbreviated as environmental harm cost ) .