Conventional approaches of cost accounting have become inadequate because they have
ignored important environmental costs and activities impacting consequences on the environment. Corporate neglect and avoidance of environmental costing have left gap of
financial incompleteness and absence of fair view of financial information reporting to users of
financial statements, environmental regulatory agencies and the general public. The research
instruments utilized in the study were primary data survey and secondary data elucidation. For
this purpose, cross-sectional and longitudinal content analyses were carried out. The test
statistics applied in this study were the t-test statistics, Pearson Product-Moment correlation
tests, ANOVA, and Multivariate Linear Regression Analysis. The study investigated best
practice of environmental accounting among companies currently operating in Nigeria.
Specifically, the study assessed the level of independence of tracking of costs impacting on the
environment; level of efficiency and appropriateness of environmental costs and disclosure
reporting. Findings are that environmental operating expenditures are not charged
independently of other expenditures. There is also, absence of costing system for tracking of
externality costs. Environmental accounting disclosure does not however, take the same pattern
among listed companies in Nigeria. Considering the current limited exposure of many
organizations to environmental accounting methodology, this study proffers an insight into
new bases and design for environmental accounting. Recommendations among others are that
corporate organizations should develop Plans and Operating Guidelines expected to meet
Industry Operating Standards which should focus on minimizing impact on environment.
There should be continued evaluation of new technologies to reduce environmental impacts.
Standard cost accounting definitions should be agreed for environmental spending, expenditure
and management accounting in the Oil & Gas and manufacturing sectors operating in Nigeria.
Both the Nigerian Securities and Exchange Commission (SEC) and accounting practice in
Nigeria should consider the urgency of placing demand for mandatory environment disclosure
requirement on corporate organizations which impact degradation on the environment.
TITLE PAGE ii
DECLARATION iii
CERTIFICATION iv
DEDICATION v
ACKNOWLEDGEMENT vi
PREFACE viii
ABSTRACT ix
LIST OF TABLES xiv
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study 1
1.2 Statement of the Problem 4
1.3 Research Questions 7
1.4 Objectives of the Study 8
1.5 Research Hypotheses 8
1.6 Significance of the Study 9
1.7 Scope of the Study 10
1.8 Research Limitations 10
1.9 Operational Definitions 12
CHAPTER TWO
LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK
2.0 Theory, Concepts and Models 15
2.1 Social Accounting 15
2.1.1 The Social Contract Concept 16
2.1.2 Legitimacy Theory as pertaining to social disclosure 17
2.1.3 Quality of Life Theory 18
2.1.4 Risk Society Theory 19
2.2 Environmental Accounting 21
2.2.1 Significance of Environmental Accounting 28
2.2.2 Land Degradation 30
2.2.3 Pollution 31
2.2.4 Levels of Environmental Accounting 32
2.2.5 Problems of Environmental Accounting 34
2.3 Legal Foundation on Environment and Accounting 36
2.3.1 The United Nations’ Protocols and agreements on environment 36
2.3.2 The Kyoto Protocol to the United Nations framework on Climate Change 37
2.3.3 Accounting Guidance on Kyoto Agreement by Governments 39
2.3.4 Environmental Accounting implication arising from the Kyoto Convention 40
2.3.5 EU Directive on Environmental Issues in Company Annual Reports
and Financial Statements 41
2.4 Models 42
2.4.1 Market valuation of environmental capital expenditure
2.4.2 Environmental Cost Primer Model
2.4.3 The Cost Benefit Model
2.4.4 Eco-efficiency Framework
2.4.5 Environmental Quality Cost Model (EQCM)
2.5 Environmental Audit
2.6 Environmental Accounting and Reporting
2.6.1 ECQM and Financial Reporting
2.6.2 Cost Estimation for Environmental Accounting
2.6.3 Externality Environmental Costs and Property Rights
2.6.4 Internalizing Externality Costs
2.6.5 Accounting Standards on environmental issues
2.6.6 Treatment of environmental capital expenditure
2.6.7 Environmental Accounting for Market Driven Competitiveness
2.6.8 Environmental Disclosure
2.6.9 Institutional and Policy framework in Nigeria
2.6.10 Regulations, standards and codes on environment in Nigeria
2.6.11 Policy Assessment
2.6.12 Mandatory disclosure for corporate organizations in Nigeria
2.6.13 Environmental Standards in Nigeria
2.7 Environmental Quality Reporting Model (EQR) and Research Operationalization
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design
3.2 Area of Study
3.3 Population and Sampling Procedure
3.4 Sampling Technique and Size
3.5 Environmental Quality Reporting/DisclosureModel Specification
3.6 EOQ Model 1
3.7 EOQ Model 2
3.8 Data Descriptions
3.9 Instrument Reliability and Validity
3.10 Estimation Technique / Rating Scale
3.11 Technique for Data Analyses
CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION
4.1 Sources of Data Collection
4.2 Factor Analysis of Primary Data
4.3 Secondary Data Analysis
4.4 Test of Hypothesis 4 (H0)
4.5 EQR Model 1 Regression Function and Test for Hypothesis 3 (H0)
4.6 Primary Data Analysis
4.7 EQR Model 2
4.8 Tests of Hypotheses 1 and 2
4.9 Responses to Questionnaire and interview with Environmental Policy Regulators
4.10 Environmental Performance Reports in some companies in Nigeria
4.11 Bases and Design of Environmental Cost Accounting
4.12 Environmental Financial Statements (EFS) Model
4.13 Reporting of Financial Statements to External Public and Accounting users
4.14 The United States Superfund
CHAPTER FIVE
DISCUSSION OF FINDINGS, POLICY RECOMMENDATIONS AND
CONCLUSIONS
5.1 Overview of the Study Objectives
5.2 Discussions of Findings
5.3 Policy Recommendations
5.4 Conclusions
5.5 Contributions to knowledge
5.6 Areas of Future Research
References
Appendices