Enviromental Accounting and Information Asymmetry (original) (raw)
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Information Asymmetry and Environmental Accounting : An Empirical View
This study was based on the level of information asymmetry in environmental accounting practice in Nigeria. This study was necessary on the grounds of providing solution to the green house effect from the accountant's perspective. Two big oil prospecting firms were studied and primary data was collected with a questionnaire and data was analysed with SPSS, the results revealed that information asymmetry has a correlation with lack of full disclosure of financial statements, objectivity of financial statement and lack of value disclosure of negative economic externalities. The study recommended that, Governments at both the Federal and State levels should put up strong legislations on disclosure of environmental externalities in the financial statements again IFRS should come up with standards on environmental accounting with special reference to disclosure of negative externalities.
Abstract In the last decade, environmental accounting and reporting have received increasing attention from investors, regulators and other stakeholders. Some developed countries require mandatory reporting on environmental matters; but no accounting body has yet formally issued any comprehensive guidelines or standards on the issue. In this paper therefore, we have tried to define environmental accounting with its scope and also using simple percentages and chart as a means of data presentation. This paper made a comparative analysis of the perceptions of prepares and users of accounting information towards the disclosure of environmental information in annual reports of organisations in Nigeria. The paper observed that based on the 89.5% response rate 63.5% of preparers accountants and managers of accounting information representing a total of 165 out of the 260 questionnaires retrieved were affirmative that environmental information should be disclosed in organisation’s financial statements while 36.5% were of the opinion that the present conventional accounting) system is sufficiently okay and therefore rejects the idea on the need for the disclosure of environmental information. The paper concludes that a positive relationship exist from the responses given by preparers and all the identified users of the accounting information. Keywords: Stakeholders, Environmental Accounting, Nigeria, Regulators, Preparers, Environmental information,
In Nigeria, disclosure of environmental accounting information in annual report of companies is voluntary as there are no accounting standards or regulatory and statutory guidelines that mandated such disclosures, companies adopt disclosure as a result of good industrial practice, pressure from environmental activist and advocates and relationship with parent company. This study analyzed environmental accounting disclosures practices of Nigerian quoted firms and see how it varies from one company to another since there are no mandatory disclosure guidelines. A sample of 8 quoted companies was selected out of 19 consumer goods companies listed on the Nigerian stock exchange. Content analysis was used to obtain data from published annual reports of 2013 of the selected firms. And the data obtained were analyzed using one way analysis of variance to test the hypothesis. It was discovered that accounting standards do not significantly influence environmental accounting disclosures the non-existence of the standard Leads to lack of uniformity in disclosure and variations obtained in testing the hypothesis. It is recommended that with the pressures companies are subjected to disclose every information about their operations, it would be proper if the international accounting standards setting body comes up with a uniform standard on how companies should disclose their environmental accounting information. Introduction Companies are expected to prepare annual reports which disclose both qualitative and quantitative information about their operations and performance (economical, financial, social or otherwise) to be presented to their stakeholders (owners or shareholders, government, employees etc.). The informational content requirements of these stakeholders are diverse and as such firms must not only disclose information about their financial performance but prepare other reports as Environmental Accounting reports, Sustainability report, Human Resources Accounting report, Good Corporate Governance report etc. Environmental accounting as observed by Beredugo and Mefor (2013) citing Yaklou and Dorweile (2003) is an inclusive field of accounting. It provide reports for both internal use generating environmental information to help make management decisions on pricing, controlling overhead and capital budgeting and external use, disclosing environmental information is of interest to the public and to the financial community. In the developing countries, and Nigeria in particular, research previously conducted has shown that environmental accounting disclosure are voluntary as a result of non-availability of either local or international standards to guide disclosure. Companies tend to disclose this information to conform to industry practices, pressures from environmental activist and advocates, relationship with parent company (MultiNational corporations), ownership structure of the company, size and level of profitability etc. The current position of environmental accounting reporting and disclosures might best be described as confusing and full of ambiguity. Statutory, regulatory, quasi-regulatory agents and standard setters are yet to prioritize the reporting and disclosure of environmental accounting. While the accounting profession globally recognized the financial importance and significance of environmental costs and benefits. The majority argued that the accounting and reporting for these costs need no new theoretical issues and underpinnings but rather the guidance and requirement of IAS1 (presentation of financial statement) are satisfactory. How do lack of accounting standards affects disclosure and what is the level of variations in the disclosure are some of the pertinent issues this paper intend to unravel. The main objective of this paper is to assess the environmental accounting disclosure practice of Nigerian quoted in the Consumer goods sector of the Nigerian
Environmental accounting and reporting practices as an emerging trending issue is dynamically fruitful to the fulfilment of the yearnings and aspirations of the key stakeholders in the corporate set up. It introduces transparency and accountability particularly in the area of resources management more so with natural resources. It involves the identification, measuring and controlling of costs, liabilities and consequentially assets that may be affected in the course of ordinary business and it encompasses sustainability reporting as well. A combination of primary and secondary data revealed that environmental accounting is still at infancy and the need for an implementation roadmap backed by the necessary statutes will be desired to ensure that all the accruable benefits of environmental accounting and reporting are enjoyed.
Determinants of Environmental Accounting Disclosure of Listed Oil and Gas Firms in Nigeria
2020
The demand for environmental disclosures, have continued to make wave as both the investors, policy maker and others stakeholders continue to see the need. The fluctuation on the reporting has also trigger debate on the mind of researchers as to what determines the environmental accounting disclosure. In the light of this, the study examines the determinants of environmental accounting disclosure of listed oil and gas firms in Nigeria. The study adapted Dibia and Onwechekwa (2015) model and measure environmental accounting disclosure with a dichotomous variable. Data for the study were obtained from the audited annual report of the 10 sampled firms for a period of 7 years covering 2012 to 2018. The study employed pooled logistic regression as tool for analysis and testing of hypotheses. The result shows that profitability has negative and significant effect on environmental information disclosure, leverage has insignificant effect on environmental accounting disclosure, audit firm type and firm size have positive and significant effect on environmental accounting disclosure The study concludes that profitability, firms size and audit firm type are determinants of determinants of environmental accounting disclosure of listed oil and gas firms in Nigeria. The study recommends among others that management of profitability firms should reorient their mindset on environmental accounting disclosure and continue to see environmental disclosure a necessity for satisfying majority of the stakeholders.
Environmental Accounting Disclosure and Market Value of Listed Non Financial Firms in Nigeria
2022
This study examined how environmental accounting disclosure influences the market value of listed non financial firms in Nigeria between 2012 and 2020. The research design adopted is the longitudinal design. A total population of one hundred and twelve (112) listed non-financial firms was identified. A purposive sampling was used to generate a sample of seventy-two (72) listed non-financial firms sourced from firms' annual reports. The dependent variable is the market value measured using earnings per share (EPS). The independent variable is environmental accounting measured by the index of environmental disclosure constructed using a content analysis; eight themes of the Global Reporting Initiatives (GRI). The study employed panel feasible generalized least square regression technique for data analyses. The outcomes revealed that environmental disclosure influence earning per share as well as share price positively and significantly. Hence, this study found robust proof which suggests that environmental disclosure significantly influence market value of listed nonfinancial firms in Nigeria. The implication is that non-financial firms in Nigeria are yet to show much concern about the physical environment in which they operate; in terms of adherence to the environmental laws and standards, process and product related issues including those related to recycling, packaging, waste, pollution emissions and effluent discharges as well as provision of sustainability and other environmental related information. It recommends that corporate firms should prioritize the inclusion of environmental information in their annual reports as such has potential to bring about higher market value.
Must Firms Adopt Environmental Accounting? Adoption Challenges in Nigeria
Trends Economics and Management, 2017
Purpose of the article: The purpose of this paper is to consider why firms find it challenging to adopt environmental accounting. The authors argue that environmental accounting is one of the important vehicles corporate bodies utilize in communicating with the external world. With the increase in complexities of the business world, the role of environmental information has been gradually increasing for making economic decision. Methodology/methods: The research is exploratory in nature and only considers a small subset of Nigerian firms. However, several firms may be faced with varied challenges of adopting environmental accounting. The authors used four hundred (400) questionnaires and data obtained from the field survey was analyzed using t-values. Scientific aim: The paper examined the adoption challenges of environmental accounting among Nigerian firms. Findings: The study found that lack of environmental awareness by employees, shortage of environmental information and higher adaptation costs hinders environmental accounting adoption in Nigeria. Moreover, there are no clear-cut guidelines of environmental accounting on issues such as environmental costs, assets, liabilities, recognition and measurement of such costs. Conclusions: Government and accounting regulatory bodies should play more active role in the development of environmental accounting and reporting guidelines by making it reliable and relevant to users. As a matter of fact, there should be a deadline imposed on Nigerian companies to fully adopt and implement environmental reporting guidelines. In addition, employees should be trained on environmental reporting techniques.
Vocational and Technical Education Journal, 2020
The depletion of the ozone layer of the earth's atmosphere caused by emission of gasses through industrial activities and processes have given rise to various environmental hazards such as direct ultraviolet rays to the earth surface, global warming, pollution and loss of aquatic lives. One of the major contributors to industrial gas emissions are the oil producing companies. This study tends to explore the environmental accounting practices adopted by the oil companies in South-South Nigeria to determine if the companies have taken cognizance of the hazards caused to the environment through their business activities. The study adopted survey design. The population of the study is 73 consisting 41 accountants from the five selected oil companies and 32 Chartered Accountants from accounting firms. The study adopted purposive sampling technique. The instrument for data collection was a structured questionnaire. The instrument was face-validated by three experts. Two experts from the Department of Business education, University of Nigeria, Nsukka, and one from chartered accounting firm. The reliability of the instrument was tested using Cronbach Alpha reliability coefficient. Mean and standard deviation were used to answer the research questions, while the hypotheses were tested using t-test at 0.05 level of significance. The study found that there is no statutory demand for corporate reporting of environmental accounting of the oil companies in Nigeria. The study therefore recommended that government should through the Ministry of Environment and natural resources and accounting regulating bodies make environmental corporate disclosure a compulsory practice by oil companies in Nigeria.
Journal of Accounting and Management, 2020
We examine the effect of environmental accounting on the quality of accounting disclosure of shipping firms in Nigeria. Accounting reports among shipping firms are found to be deficient over time because they lack the necessary information to enable stakeholders to make informed decisions. We administered questionnaires to the staff of registered shipping firms in Nigeria and analysed data using multiple regression. Findings show that environmental accounting influences the quality of accounting disclosure of shipping firms in Nigeria. We found a significant positive association between environmental accounting and quality of accounting disclosure of shipping firms in Nigeria. Firms need to recognise a liability in the statement of assets and liabilities once it is feasible that the economic benefit of an outflow of resources will offset present obligation. We recommended that firms need to decide by discretion which expenditure or cost should include as environmental expenses or cost. Moreover, environmental costs should be capitalised or expensed as it is considered a contentious cost item for accountants and financial analyst. Firms should consider the extent of current environmental regulations and involvement; existing legal, economic, political and scientific experiences; the complexity of the environmental problem; and existing and availability of technological experience.
Corporate Environmental Accounting Information Disclosure in the Nigeria Manufacturing Firms
The study examined the influence of firm characteristics on the quality of Corporate Environmental Accounting Information Disclosure (CEAID) in the Nigeria manufacturing companies. Ex-post facto and content analysis research designs were adopted. The study collected panel data for seven year period covering 2008-2014 from the annual reports of 10 quoted selected manufacturing firms. The study applied the use of Weight Average Environmental Disclosure Index to measure the quality of CEAID based on financial disclosure. The pooled panel data least square regression model was used to estimate the influence of the independent variable on the dependent variables. The results strongly showed that firm financial performance has a significant impact on the quality of CEAID, but firm size had no impact on the quality of CEAID. The descriptive analysis showed that the highest quality of CEAID as examined using the Global Reporting Initiative and IS0 14301 environmental requirement is far below standard at 2.5%. The study concluded that voluntary CEAID alone would not enhance the quality of CEAID in the manufacturing firms in Nigeria. Civilisation has involved many countries in industrial activities such as refining, manufacturing mining and other activities many of which generate waste with potential constituents. The ultimate disposal of waste leads to environmental pollution in many parts of the world thereby constituting environmental problems. The magnitude of contamination of the environment has already reached an alarming level (Srinivas, 2014). According to Wabuyi (2009), the bad environmental behaviour may have an adverse impact on the business and its finances. Therefore environment risks such as of global warming, atmospheric, soil and water pollution (Dutta & Bose, 2008), cannot be ignored. It is because the success or failure of a company may be determined not only by the products or services it deals with but also by the complexity of its environment (Adediran & Alade 2013). Organisations are now expected to show their awareness of environmental issues, and that they are addressing the impact which their operations has on the environment and society in general (Uwuigbe and Jimoh, 2012) by accounting and reporting them. According to Srinivasa, (2014), the importance of environmental accounting and reporting is expanding because of expansion in environmental problems, economic, communal and technological development. As a result of environmental issues most developed countries have initiated mandatory disclosure of environmentally related matters (Uwuigbe and Jimoh, 2012). Most of the research carried out in this developed countries have shown that firm size, and financial performance which is amongst the company primary characteristic has an influence on the quality of Corporate Environmental Disclosure. However, in developing countries (Nigeria Inclusive) CEAID still rely heavily on voluntary initiation of reporting institutions (Onyali et al. 2014).Therefore; it is inconclusive if such firm characteristics would also influence the quality of CEAID in Nigeria Manufacturing Firms and if voluntarily initiation alone would produce high quality of CEAID. Corporate Environmental Accounting Information disclosure (CEAID) entails the financial and non–financial disclosure of social and environmental aspects upon which manufacturing firms activities have an impact on its environment. There is a dearth of literature on Corporate Environmental Accounting Information Disclosure in Nigeria. Also, no study has examined if firm size and financial performance influences the quality of corporate environmental accounting information disclosure specifically in the manufacturing firms in Nigeria using Global Reporting Initiative and International Standardization for Organization 14301 as a guide in accessing the quality of CEAID. This gap in the literature is what the study seeks to fill. In Nigeria, the increasing environmental issues of which manufacturing industries tend to have a profound impact on the environment calls for examination of the quality of environmental accounting information voluntarily provided in their annual reports to creating awareness among the stakeholder. Therefore, the primary objective of this study was to examine if certain firm characteristic influence the quality of CEAID. The study specifically seeks to determine; (i) the influence of firms' size on the quality of CEAID (ii) the impact of financial performance on the quality of CEAID in the selected manufacturing companies in Nigeria.