Environmental Accounting and Social Responsibility Disclosure on the Earning Capacity of Nigerian Manufacturing Firms

Abstract

This study assessed environmental accounting and social responsibility on the earning capacity of selected Nigerian manufacturing companies. The study highlighted some environmental relatedcosts incurred in preventing, reducing or repairing damages to the environment and social cost incurred to acknowledge organizations’ responsiveness to the society at large. Emphasis was also carried out to ascertain the extent of compliance by Nigerian companies on environmental accounting and social responsibility with the International Standard of Accounting and Reporting disclosure (ISAR) requirements. Data were collected from three manufacturing firms in Nigeria through the administration of questionnaires and researchers’ checklist. These data were tested using population t-test, ordinary least square and multivariate statistics and was revealed that there is a significant difference between the compliance level of Nigerian companies on environmental accounting and social responsibility disclosures and the ISAR requirements.Environmental cost proxy as: waste management cost, pollution abatement cost, and Fines & Penalty significantly affect companies’ earning capacity. It was recommended that firmsshould be sensitive to their environmental activities, and account for all environmental related costand they should desist from environmental pollution and degradations.

Keywords: Environmental Accounting, Social Responsibility, Waste management cost, pollution abatement cost, Fines & Penalty