Environmental Green Accounting and Auditing Practice

Nur eny Lolo, Muh. Rum


Environmental accounting reflects a business to capture in financial portrait system connecting with the environment and must impact to an ecosystem where their operating system involves in. The main criticism to accounting is environmental devastation, specifically deforestation and waste.  The objectives of this study are to describe the rationale of why a business entity willing to undertake an environmental audit, what is the main benefit and costs to carry out an environmental audit, how the role of an environmental audit within an environmental management system and describe environmental costs on environmental accounting. Commonly multinational companies can contribute towards, sustainable environment by innovating and improving their products and processes in order to use raw materials more efficiently in reducing waste generated from production proces, improving waste disposal methods and improving work conditions (Joseph et.al, 2016). This study employed descriptive studies to describe various aspects of environmental aspect and accounting treatment to the whole criticism, which regarding as payable account. This study explained as a state of affairs as they are at present with the researcher having no control over the variable. The result in, environmental cost accounting represents a set of principles and approaches providing essential information for the specific activities in environmental management. Environmental accounting discloses the environmental costs - it is a system of planning and managing the environmental performance which should reflect the managerial style and commitment of the economic entity management to the environment. It has the relevance of integrating environmental issues in the financial and decisional economic entity. Environmental accounting can produce a lot of benefits for an organization, including cost savings and increased management effectiveness and both large and small organizations, moreover can benefit from undertaking an environmental audit. Environmental costs have been recorded according to the types of expenses according to their functions should be reflected in the costs and expenses of the current accounting period.

Keywords: Environmental Accounting and Auditing, Cost and Benefit, Sustainable Environment

DOI: 10.7176/RJFA/10-8-07

Publication date: April 30th 2019

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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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