Evaluation Of The Impact Of Environmental Accounting On The Manufacturing Industry

The objective of this study is to present the impact of environmental accounting and reporting practices of manufacturing industries of the Nigerian. The study was carried out in Abuja metropolis, FCT, Nigeria. A total of 134 respondents were selected from the population figure out of which the sample size was determined. The primary source of data collected was mainly the use of a structured questionnaire. Data collected will be analyzed using frequency table, percentage and mean score analysis while the nonparametric statistical test (Chi-square) was used to test the formulated hypothesis using SPSS (statistical package for social sciences). The study also calls for more efforts to be taken on the part of government to encourage managers on the need to embrace environmentally friendly practices in order to restore and guarantee a conflict free corporate atmosphere needed by managers and workers for maximum productivity.

Introduction

1.1 Background of the Study

Managers within organization are coming under increased pressure to not only reduce costs, but also to minimize the environmental impacts on their operations. Unfortunately a substantial impact on the environment has left Nigeria with an enormous economic, social, and environmental legacy. Most environmental degradations and emissions are anthropogenic, an advent traceable to the industrial revolution of late 18th century where economic activities in many communities moved from agriculture to manufacturing. Production shifted from its traditional locations in the home and the small workshop to factories. The overall amount of goods and services produced expanded dramatically. New groups of investors, businesspeople, and managers took financial risks and reaped great rewards. In the long run the industrial revolution has brought economic improvement for most people in industrialized societies. Many enjoy greater prosperity and improved health. There have been costs, however. Industrialization has brought factory pollutants and greater land use, which have harmed the natural environment (Mastrandrea and Schneider, 2008).

Environmental accounting is an inclusive field of accounting. It provides 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 of interest to the public and to the financial community. Internal use is better termed environmental management accounting (Bartolomeo et al., 2000).

Environmental accounting is the identification and reporting of environment specific costs, such as liability costs or waste disposal costs. It is also defined is as accounting for any costs and benefits that arise from changes to a firm"s products or processes, where the change also involves a change in environmental impacts. Environmental accounting is a subset of accounting proper, its target being to incorporate both economic and environmental information. It can be conducted at the corporate level or at the level of a national economy through the National Accounts of Countries (among other things, the National Accounts produce the estimates of Gross Domestic Product otherwise known as GDP).

Environmental accounting is a field that identifies resource use, measures and communicates costs of a company"s or national economic impact on the environment. Costs include costs to clean up or remediate contaminated sites, environmental fines, penalties and taxes, purchase of pollution prevention technologies and waste management costs. An environmental accounting system is consisted of environmentally differentiated conventional accounting and ecological accounting. Environmentally differentiated accounting measures effects of the natural environment on a company in monetary terms. Ecological accounting measures the influence a company has on the environment, but in physical measurements, (Wikipedia, 2013).The accounting environment can include activities such as accounting systems that enhance the ability to detect Recording and reporting the work of destruction and environmental pollution and environmental-based integration as a source of Capital and consideration of environmental costs as an acceptable cost of computational processes and economic, (Sajad, et al , 2013).

1.2 Statement of the Problem

The statement of the problems of this research work is to help us evaluate the impact of environmental accounting on the manufacturing industry. From the assessment carried out on the disclosure report in the financial statement of Nigeria breweries. It was discovered that there are:

Lack of environmental awareness.

Lack of perceived benefit

Lack of government pressure

Lack of environmental audit.

1.3 Objective of the Study

The objective of the study is to present the impact of environmental accounting and reporting practices of manufacturing industries of the Nigerian.

Other specific objectives are:

To find out whether there is significant relationship between environmental awareness and environmental accounting in the manufacturing industry in Nigeria.

To find out if manufacturing industries in Nigeria has apparently benefited from environmental accounting system

To find out if government pressure has significant impact on application of accounting in Nigeria manufacturing industry.

To find out the impact of environmental audit on financial statement of manufacturing industries.

1.4 Research Hypotheses

The associated hypotheses include:

H0: There is no significant relationship between environmental awareness and environmental accounting in the manufacturing industry in Nigeria.
Hi: There is significant relationship between environmental awareness and environmental accounting in the manufacturing industry in Nigeria

Ho: Manufacturing industries in Nigeria has not benefited from the concept of environmental accounting system.
Hi: Manufacturing industries in Nigeria has benefited from the concept of environmental accounting system.

Ho: Environmental audit has positive effect on the financial statement of manufacturing industries.
Hi: Environmental audit has no positive effect on the financial statement of manufacturing industries.

1.5 Significant of the Study

This study was done to clarify the importance of the need to environmental accounting, as this field continues to suffer deficiencies in the Nigerian accounting system.

Identifying the views of financial and accountants opinions about what should be saved from the elements for the application of environmental accounting and therefore, that would lead to the effective application of environmental accounting and demonstrate financial lists and environmental reports, which lead to changes in consumer behavior for moving to deal with companies that show their efforts in reducing the negative environmental impacts resulting in increasing in profitability and competitiveness.

Shedding light on the role that legislations can perform in encouraging, urging, or binding companies to implement environmental accounting.

It is expected that this study will develop management comprehension to adopt implementing environmental accounting idea in their firms.

This study is a contribution to the achievement of social demand adopted by the bodies and governmental and private environmental organizations with respect to environmental matters and determines the cost of damages and ways of solving it.

1.6 Scope of the Study

This study carried out investigations spanning through mainly the manufacturing sectors. The study investigated the manufacturing companies among listed companies in the Nigeria Stock Exchange namely the agricultural, breweries, automobile and tyres, building materials, chemicals & paints and conglomerates listed in the Nigeria Stock Exchange Market considered as environmental polluters. There are 215 companies in their varied economic sectors from which samples are selected. The modality of this selection is reported in the section on Research Methodology.

1.7 Limitations of the Study

The demanding schedule of respondents at work made it very difficult getting the respondents to participate in the survey. As a result, retrieving copies of questionnaire in timely fashion was very challenging. Also, the researcher is a student and therefore has limited time as well as resources in covering extensive literature available in conducting this research. Information provided by the researcher may not hold true for all businesses or organizations but is restricted to the selected organization used as a study in this research especially in the locality where this study is being conducted. Finally, the researcher is restricted only to the evidence provided by the participants in the research and therefore cannot determine the reliability and accuracy of the information provided.

Financial Constraint:

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time Constraint:

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

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