ABSTRACT
This study is
aimed at examining the responsiveness of organizational performance to
environmental accounting information of motor vehicle manufacturing firms in
South East, Nigeria. Past studies show that there is a gap as a result of gross
inadequacy in including environmental costs in processing firm accounting
information. The data sources were mainly primary. The simple survey design was
used in carrying out the research, employing questionnaire method, interviews,
phone calls and e-mails. Judgmental techniques were employed in the sample
selection from the population. Hypotheses formulated were tested, using
appropriate test statistics, Analysis of Variance ( ANOVA) for Hypothesis 1 and
the Pearson’s product moment correlation co-efficient (PPMCC) for Hypothesis
II, Hypothesis III and Hypothesis IV. Data collected were presented using
tables, figures, and analyzed with the appropriate test statistic as mentioned
above. The results of the hypotheses testing reveal as follows:
Hypothesis I:
Environmental
cost allocation processes adopted by motor vehicle manufacturing firms in
South East, Nigeria
are not significantly
different (p>0.05).
Hypothesis II:
Environmental
consciousness had significant positive
relationship with firm size (p<0.05). Hypothesis III:
Environmental cost disclosure in the financial report had significant positive
relationship with firm profitability (p<0.05). Hypothesis IV: There is
significant positive relationship between environmental cost and firm
profitability (p<0.05).The study discovered that environmentally- friendly
firms perform better and significantly disclose environmental related
information in financial statements and reports. It is relevant to the extent
that the management of the motor vehicle manufacturing firms should make use of
the result to plan the firms’ operations to achieve effective performance. It
is suggested that future works should address the issue of Environmental
Accounting Information with respect to manufacturing firm performance, not excluding
non-manufacturing firms. Furthermore, it is of great relevance not to limit the
impact of environmental cost to firm performance, but to emphasize on the
mandatory inclusion of environmental costs in processing accounting information
at all levels of firm operation.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
All over the world, including
Nigeria, many business establishments have concern in environmental management
in order to address the business organizations to new challenges of the
environment. Enahoro (2009) arguably recognizes that the world’s two greatest
challenges are poverty and the systematic destruction of the environment. The
world at large, including Nigeria, has enacted some laws and regulations on
environmental protection. The US Environmental Protection Agency (US EPA) is
responsible for enacting and implementing US Environmental Protection Laws such
as the Atomic Energy Act (AEA), Clean Air Act (CAA) and Clean Water Act (CWA)
(margazine.merckgroup.com). There are some environmental laws by the
Constitution of Federal Republic of Nigeria (1999). Section 20 of the ACT,
mandated the protection of air, land, water, forest and wildlife. There are
other environmental protection laws in Nigeria by National Environmental
Standards and Regulations Enforcement Agency Act, NESREA, (2007). Such laws
are: Harmful Wastes (Special Criminal Provisions) Act 2007 which encourages
sanitation and pollution prevention and control. There is the Petroleum Act,
Petroleum Products and Distribution (Management Board) Act, Factories Act and
Water Resources Act. (magazine.merckgroup.com). The United Nations Division for
Sustainable Development, (UNDSD), 2003, identified some techniques for managing
environmental costs. Environmental Impact Assessment Decree (EIA), 1992 plays
some important roles with respect to the protection of the Nigerian
environment.
The importance of Environmental
Management Accounting (EMA) can never be over-emphasized. It is becoming increasingly
important for Environmental Management decisions, as well as for all types of
routine management activities. (Jasch, 2006a and Burritt, 2004). The
environmental management is actually regarded as part of the administration’s
strategy to specify measures for dealing with environmental issues. It is also
used internally for carrying out environmental conservation activities. As a
matter of fact, Environmental accounting is a veritable tool in the hands of
management to carry out effectively and efficiently its managerial activities.
Environmental accounting data is mainly used by the management of organizations
to carry out their internal processes. They are also used externally through
disclosure in environmental reports. The disclosure of environmental data is
one of the key elements in an environmental report. The importance of this
disclosure is that it enables the parties utilizing the information to get an
understanding of the firm’s stand on environmental conservation, and how to
specifically deal with environmental issues.
In order to achieve, as well as to
maintain effective and efficient business management resulting in effective
performance, there is the need for a very good management of environmental
conservation activities. This can be achieved through accurate identification
and measurement of investments and costs related to environmental conservation
activities including the preparation and analysis of the data. Environmental
accounting also helps the organization to have a better insight into the
potential benefit of its investments and costs, thereby improving the
efficiency of its activities.
As indicated previously, a good
number of authors like Allewine and Stone on environmental issues and
environmental accounting in particular, have given a variety of....
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