A Model for Environmental Management Information Disclosure Requirement in Financial Reporting

Document Type : Original Article

Authors

1 Ph.D. Student, Department of Accounting, Science and Research Branch, Islamic Azad University, Tehran, Iran

2 Professor of Accounting, Islamic Azad University, Central Tehran Branch, Tehran, Iran.

Abstract

This study aimed to propose a prescriptive model of environmental reporting in Iran. The model was developed through exploratory research and a qualitative approach using the grounded theory method. The research population included experts in the fields of accounting, environment, natural resources, and law. The snowball sampling method was used to select the respondents for the interviews. After analyzing the data, a model for environmental management information disclosure requirements in financial reporting was developed. The results indicated that environmental laws (measurement and reporting requirement) were classified as causal conditions, international financial reporting standards(IFRS)as underlying conditions, and sustainability reporting standards and acquisition of competitive advantages (adhering to accountability and gaining legitimacy) as intervening conditions. Model strategies include reporting quantitative and qualitative environmental information in the value chain in the form of a board report to the assembly, explanatory notes, and defining a new financial statement. Furthermore, acquiring the component of national power (preserving scarce and non-renewable resources, preventing destructive and polluting activities, maintaining public health, establishing environmental justice among different generations and communities, preventing corruption and rentier capitalism, and achieving sustainable development) and facilitating international political and economic relations, assessing the continuity of corporate activity and public supervision, and reducing information asymmetry were identified as the implications of the developed model.

Keywords

References

  • Abbasi, E. &Mohammadi, F. (2012). Financial reporting ofthe environmental performance of polluting companies listed on the stock exchange. Health Accounting, 1(1), 33-46.
  • Allameh, A. (2004). Investigation of environmental accounting informational content in financial reporting. Master Thesis: Tehran University.
  • Azizul Islam, M. (2009). Social and Environmental Reporting Practices Organizations Operating in, or Sourcing Products from, a Developing Country: Evidence from Bangladesh. University of Dhaka.
  • Baharloo, R., Moinuddin, M. & Hirati, F. (1399). Explaining corporate environmental issues with a phenomenological approach: A case study of cement, lime, and gypsum industries). Management Accounting, 13(35), 43-61.
  • Banerjee, B. 2006. Corporate Environmental Accounting and Reporting. The Chartered Accountant. Vol. April: 1432-1439.
  • Banimahd, B. Talebnia, G., & Azuji, H. (2009). A study of the relationship between environmental performance and financial performance. Journal of Financial Accounting and Auditing, 1(3), 149-174.
  • Barry, J. (2001), Environment and Social Theory. Translated by Hassan Pouyan and Nayreh Tavakoli. Tehran: Department of Environment.
  • Bozorg Asl, M. & Ahmadi, S. (2013), Investors' reaction to various types of corporate social reporting. Quarterly Journal of Experimental Financial Accounting Research, 3, 101-117.
  • Danaeifar, H. &Kazemi, H. (1391). Qualitative explorationand research design: A choice from five approaches (narrative research, phenomenology, grounded theory, ethnography, and case study (1st edition). Tehran: Ishraqi Publications, Saffar.
  • Danaeifar, H., Alwani, S. M., & Azar, A. (2004). Qualitative research methodology in management: A comprehensive approach. Tehran: Ishraqi Publications, Saffar.
  • Dehdar, F. &Ahmadian, A. (2017). Environmental accounting reporting. Journal of Accounting, 304-303, 36-41.
  • Dehdar, F.& Ahmadian, A. (2017). Environmental accounting reporting. Journal of Accountant, 304-303, 36-41.
  • Ebimobowei, A. 2011. A Study of Social Accounting Disclosures in the Annual Reports of Nigerian Companies. Asian Journal of Business Management, 3(3): 145-151.
  • Edu, B., E. Esang. A. E. and A. D. O. Otonkue. 2009. Environmental Financial reporting. Available at: http://www.ssrn.com.
  • Fakhari, H. &Mehrab, M. (2018). Identifying the approachesadopted investment analysts in the use of environmental information. Health Accounting, 7(1), 80-102.
  • Fakhari, H. Malekian, E., &Jafai Rahni, M. (2017), Explaining and ranking the components and indicators of environmental, social, and corporate governance reporting using hierarchical analysis in companies listed on TehranStock Exchange. Value & Behavioral Accounting, 2(4), 153-187.
  • Frankle, A., W., and J. C. Anderson. 1980. Voluntary Social Reporting and Iso-Beta Portfolio Analysis. Accounting Review. 55(3): 469-478.
  • Gallego-Álvarez, I., M. B. Lozano., and M. Rodríguez-Rosa. 2018. AnAnalysis of the EnvironmentalInformation in International CompaniesAccording to the New GRI Standards. Journal of Cleaner Production. 182: 57-66.
  • Gao, S, S. S. Heravi., and J. Z. 2005. Determinants of corporate social and environmental reporting in Hong Kong: A research note. Accounting Forum. 29: 233-242.
  • Gholampour, A. (2005). The effects of economic globalization on the role of government in environmental political economy in developing countries: Case of Iran. Quarterly Journal of Politics, Journal of the Faculty of Law and Political Science, 37(4), 125-152.
  • J.E., and L. D. Parker 1990. Corporate social disclosure practice: A comparative international analysis. Advances in Public Interest Accounting. 3. 1-3:159-175
  • Healy, P. M., and K. G. Palepu. 2001. Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. 31:405-440
  • Hejazi, R.& Ghanbari, Y. (2011). Introduction to environmental management accounting. Accounting & Auditing Research, 1(2), 129-150.
  • Herati, J.; Dehghani, A., Taghizadeh, H., &Amini, T. (2016). The impact of economic and political inequality on environmental quality in selected countries: GMM panel model. Quarterly Journal of Economic Modeling Research, 23, 197-232.
  • Jalali, F. (2008). Environmental reporting: Benefits and obstacles. Journal of Accountants, 201, 68-77.
  • Jami, M. &Hosseini, S. M. (2019), Barriers and problems affecting the education and application of environmental accounting from the perspective of accounting students. Quarterly Journal of Accounting and Management Perspective, 2(10), 13-25.
  • Jamil, C.Z.M., K. Alwi, and R. Mohammed. 2003. Corporate social responsibility disclosure in the annual reports of Malaysia companies: A longitudinal study. Analysis. 10(1): 139-159.
  • Janani, M. H. &Heidari, M. (2011). Feasibility study of environmental reporting implementation in Iran. Management Accounting, 4(9), 69-84.
  • Jenkins, H., and N. Yakovleva. 2008. Corporate social responsibility in the mining industry: Exploring trends in social and environmental disclosure. Journal of Cleaner Production. 14(3-4): 271-284.
  • Kalikov, M., B.h. Uteyev, A. Khajieva, and U. A. Torekulova. 202. Green Economy as a Paradigm of Sustainable Development of the Republic of Kazakhstan. Journal of Environmental Accounting and Managemen. 8: 281-292.
  • Kalikov, M., B.h. Uteyev, A. Khajieva, and U. A. Torekulova. 2020. Green Economy as a Paradigm of Sustainable Development of the Republic of Kazakhstan. Journal of Environmental Accounting and Managemen. 8: 281-292.
  • Khozin, A., Talibonia, G., Gerkaz, M., & Banimahd, B. (2016). The analysis of the level of development of environmental financial reporting of companies listed on the Tehran Stock Exchange. Health Accounting, 5(2), 28-46.
  • Latridis, G. E. 2013. Environmental Disclosure Quality: Evidence on Environmental Performance, Corporate Governance, and Value Relevance. Emerging Markets Review. 14: 55-75.
  • Mahadeo, J., V. Oogarah-Hanuman. and T. Soobaroyen. 2011. Changes in social and environmental reporting practices in an emerging economy (2004-2007): Exploring the relevance of stakeholder and legitimacy theories. Accounting Forum. 38: 1–18.
  • Malekian, E., Fakhari, H., Jafaei Rahni, M. (2019). The effect of the characteristics of the company's board of directors on the level of environmental, social, and corporate governance reporting. Journal of Accounting Knowledge, 10(2), 77-112.
  • Maran Jori, M. &Alikhani, R. (2011). Social and environmental accounting research. Journal of Accounting Knowledge and Research, 24, 24-29.
  • Marco Casazza, G. Liu, F. Maglioccola, and M. Lega. 2020. A retrospective comparison on Europe and China's ecological wisdom of pre-industrial urban communities under the lens of sustainability pillars. Journal of Environmental Accounting and Management 8: 365-385.
  • Mashayekhi, B., Mehrani, K., Rahmani, A., & Madahi, A. (2013). The development of the audit quality model. Stock Exchange Quarterly, 23(16), 103-137.
  • Mehrabi, A., Khanifar, H., Amiri, A., Zare Matin, H., & Jandaghi, G. (2011). Introducing the grounded-theory methodology for Islamic research: Presenting a model. Organizational Cultural Management, 9(23), 5-30.
  • Mirsamei, M. & Khoshtinat, M. (2002). Environmental accounting. Auditor Quarterly, 17, 16-21.
  • Mirsamei, M. (2001). Factors affecting the development of environmental accounting in Iran. Master Thesis, Faculty of Accounting and Management, Allameh Tabatabai University.
  • Nikomram, H.& Banimahd, B. (2009). Accounting theories (Introduction to descriptive theories). Islamic Azad University Press.
  • O'Donovan, G., 2002. Environmental Disclosures in the Annual Report: Extending the Applicability and Predictive Power of Legitimacy Theory. Accounting, Auditing & Accountability Journal. 15(3): 344- 371.
  • Rezaei, S. (2017). Developinga revenue generation model of Iranian football clubs:With a grounded theory approach. Applied Research in Sports Management, 6(3), 101-116.
  • Roshandel, J. (1997). National security and the international system. Tehran: SAMTPress.
  • Sajjadi, S. H. &Kazemi, T. (2016). Developing a comprehensive model of fraudulent financial reporting in Iran using grounded theory. Empirical Accounting Research, 6(21), 185-204.
  • Sarumpaet, S., 2005. The Relationship between Environmental Performance and Financial Performance Amongst Indonesian Companies. Jurnal Akuntansi &Keuangan.7(2):89-98.
  • Sepasi, S.& Ismaili Kajani, M. (2015). Green accounting: Providing a model for environmental disclosure. Health Accounting, 4(1), 1-19.
  • Sikka, Prem., 2011. Accounting for Human Rights: The Challenge of Globalization and Foreign Investment Agreements, Journal of Critical Perspectives on Accounting.22: 811-827.
  • Soleimani, G.&Majbouri Yazdi, H. (2019). Investigating the impact of environmental strategy, environmental uncertainty, and senior management commitment on corporate environmental performance: The role of environmental management accounting. Management Accounting, 12(43), 87-104.
  • Taghizadeh Khaneghah, V. &Zeinali, M. (2016). The effect of corporate social responsibility on investment efficiency and innovation. Journal of Health Accounting, 5(2), 1-27.
  • Talebnia, G., Alikhani, R., &Maran Jori, M. (2012), Assessing the quantity and nature of disclosure of environmental and social accounting information in Iran. Accounting & Auditing Reviews, 19(69), 43-60.
  • Talebnia, G., Alikhani, R., &Maran Jori, M. (2012), Assessing the quantity and nature of disclosure of environmental and social accounting information in Iran. Accounting & Auditing Reviews, 19(69), 43-60.
  • Zhibin Liu and Ming Liu. 2021. Quality Evaluation of Enterprise Environmental Accounting
    Information Disclosure Based on Projection Pursuit Model. Journal of cleaner production, volume 279.

Files

Share

How to cite

Statistics