Major Element in an Environmental Audit or Review

48 Green Accounting in Indonesia .

The Scope of Environmental Accounting

T h is p a p e r w i l l o n l y e x p l o r e f e w s u b j e c t o f e n v i r o n m e n t a l a c c o u n t i n g ’ s s c o p e

r e la t e d t o t h e a im o f p r e s e n t in g “ c o r p o r a t e e n v ir o n m e n t a l r e p o r t ’ d i s c l o s u r e .

The Benefits of Environmental Accounting

c o n t r ib u t e t o im p r o v i n g a fir m 's p r o f it a b ilit y in b o t h t h e s h o r t te r m a n d t h e l o n g te r m ( s u s t a i n a b i li t y ) . B y i m p le m e n t in g e n v ir o n m e n t a l a c c o u n t in g t h e

Vol. IS, No. 1, August 2007 © Centre fo r Indonesian Accounting and Management Research Postgraduate Program , Brawijaya University

The International Journal o f Accounting and Business Society 49

Accountants and Environmental Issues

M o s t o f t r a d it io n a l a c c o u n t in g t e x t b o o k s r e f e r t o a c c o u n t in g a s t h e la n g u a g e o f b u s i n e s s . A s a c o n s e q u e n c e , w it h b u s i n e s s a s s u m i n g a g r e a t e r r e s p o n s ib i l it y f o r e n v i r o n m e n t a l m a n a g e m e n t it w o u ld s e e m lo g ic a l to

involve accountants. Accountants are encourage to see the environment not as

a t h r e a t b u t a s a n o p p o r t u n it y .

Lickiss (1991:

6 ) , c a ll e d f o r a c c o u n t a n t t o p l a c e m o r e e m p h a s is o n

a c c o u n t in g f o r h u m a n a n d n a tu r e a s s e t s , s t r e s s in g th a t g o o d e n v ir o n m e n t a l p r a c t ic e w o u ld a l s o b e g o o d b u s i n e s s p r a c tic e . H e s u g g e s t e d f o u r part o f

s t r a t e g y f o r a c c o u n t a n t s t o i n v o lv e in :

( 1 ) encouragement

report on

The accountants’

environmental im p r o v e m e n t e f f o r t s . A c c o u n t a n t s m a y n e e d t o c h a n g e t h e ir p r a c t i c e s in a rea o f c a p ita l i n v e s t m e n t a n a l y s is , s ta n d a r d c o s t , p e r f o r m a n c e m e a s u r e , a n d

p la n n in g and control

Vol. 75 , No. 7 , August 2007 © Centre fo r Indonesian Accounting and Management Research Postgraduate Program, Brawijaya University

50 Green Accounting in Indonesia .

v a n a n c e aC ,iC e W° Ul<1 enC° U rage ,h e r e P ortm8 o f *he c o s t o f w a s t e a s a

* l n a d d it io n t o v a r ia n c e f o r w a s t e , o th e r p e r fo r m a n c e m e a s u r e s c o u l d b e

e v e l o p e d f o r q u a l it y a n d e n v ir o n m e n t a l it e m s . M a n y q u a l it y m e a s u r e s

l a v e b e e n r e p o r te d in s o m e lite r a tu r e . E n v ir o n m e n t a l m e a s u r e s c o u l d * In ti*

' ,em S r a s e n e r 8 y U S a8e’ W a sle r e d u c ,i o n - a n d w a t e r p o l lu t i o n

Zd s t o c k h o ld e r s w it h a m o r e c o m p r e h e n s i v e e v a l u a t io n q U a l'ly d a 'a W° Uld pr° V id e c u s ,o m e r s - c r e d it o r s , a n d

011 the company's

performance (Roth

a n d K e lle r , 1 997: 5 4 - 5 5 )

T h e c a lls fo r p r o a c tiv e o n th e p a s t o f a n a c c o u n tin g p r o f e s s io n in fa c in g

e n v ir o n m e n t a l is s u e , w a s c o n d itio n e d a n d c o n s tr a in e d b y m a r k e t e x p e c ta tio n r h i s o p in io n b a s e d o ih o ir a b ilitie s to d e r iv e f in a n c ia l v a lu e s a n d d e v e lo p

if o r m a tio n s y s te m s .

A ls o ,

a c c o u n ta n t have

w id e r a b ilitie s s u c h as

i n d e p e n d e n c e of m in d , in te llig e n c e , e v a lu a tiv e a b ility , th e c a p a b i li t y o f b e in g lo g ic a l a n d s y s te m a tic a n d .h e y h a v e e x p e r i e n c e in c o m m u n ic a t io n

Bui

to o X r M H - COUf " n 8 P r 0 f e s s '° " a lo n e wil1 no1 c n o u 8 h >f th e y d o n 't r e la te d to o t h e r b o d ie s o f e x p e r tis e s u c h a s s c ie n c e , o th e r w is e th e c h a ll e n g e to b u ilt

b e tte r e n v ir o n m e n t w o u ld b e c o m e lip s e rv ic e o n ly .

Accounting for Energy Management

E n er a v a t m ave n hLr 0 H"1 e m a i W i "' e '1 e r 8 y a r e c o m P ,e x a "<* s u b s t a n t ia l,

b n e r ^ y m a y b e d e r iv e fro m n o n - r e n e w a b le ( c o a l, o il t»as

Ple‘ CO} iS Ih e p r i" c ip a l 8 r c c " ^ o u s e ' g a s c o n t r ib u t in g

a c id rain T T n S° 7 l e p ° n s,aid, a b 0 llt 7 0 % l h e P r in c ip a l c o n t r ib u t o r to

a c id ram a r e S O , a n d N o , , w h ic h a r e u s u a lly c o m e s fro m e le c t r i c it v g e n e r a t i o n , m a n u f a c t u r i n g a n d h e a t in g p r o c e s s e s a n d ro a d t ra n sp o r t. B a s e d o n

t h is f a c t , s u c h a h ig h p r o p o r t io n s h o u ld b e o f c o n c e r n g i v e n t o p r e s e r v e t h e e n v ir o n m e n t b e tt e r a n d f in a n c ia l s a v in g t o b e m a d e . A c c o u n t i n g f o r e n e r g y c a n b e b u ilt b y i n v o l v i n g a c c o u n t a n t t o c o n t r ib u t e t h e d e v e lo p m e n t o f

o r g a n i z a t i o n e n v ir o n m e n t a l s e n s it iv i t y . S e v e r a l s t e p s illu s t r a t e d b e l o w m a y

b e w o u ld g iv e c le a r e r u n d e r s ta n d in g fo r a c c o u n tin g r o le in e n e r g y s a v in g

r„.. ,

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Postgraduate Program, Brawijaya University

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