Environmental costs and its role in improving the quality of financial reporting

Abstract

This study aims to show the importance of environmental costs, and the role of these costs to improve the quality of financial reporting in Libyan oil companies and offering the suggestions to develop it. To achieve the objectives of the study, the researchers developed a questionnaire contains (35) questions, distributed to (100) of the officials of the financial departments, auditing, and costs and the parties concerned with the preparation of financial reports, collected and used in the analysis, a one-sample T-test was used. It seems to the researchers that there was the presence of environmental awareness and the company's strategy towards environmental issues, the study also showed there are obstacles that limit the application of measurement and disclosure of environmental costs. Moreover, it seems to the researchers that the measurement models for environmental costs increase the company's commitment to environmental responsibilities. The results of the study also showed the presence of a statistically significant relationship between environmental costs and the increase in the quality of the financial reports. Finally, there was a statistically significant relationship between environmental costs and decision making. The study suggested some recommendations to develop the application of accounting for environmental costs and disclosure to provide appropriate information to rationalize and take decisions in the oil companies in Libya, as well as the need for companies to protect the environment and provide funding and support to preserve the environment.

Does Adopting Environmental Tax Contribute to Achieving Sustainable Development in Lebanon? A Survey of Academics and LCPAs

“…This is clearly shown in Table 8 which assert that among the most important hinderances is the lack of clear accounting standards for measurement and disclosure of environmental costs. This agrees with the results reached in the study done by Bicer and El-Darewi (2019). There is no doubt that determining the environmental tax highly depends on measurement and disclosure of environment costs.…”

“…Environmental accounting has a vital role in providing the data on the environment that is needed by diverse users, most importantly, decision-makers. After surveying some oil companies, Bicer and El-Darewi (2019) found that there exist environmental awareness and organizations' strategies towards environmental matters. The study also demonstrated that there were impediments that limit applying environmental cost measurement and disclosure.…”

The Effect of Implementing Green Accounting and CSR Disclosures on the Quality of Financial Reporting With Institutional Ownership as a Moderation Variable

“…Environmental protection organizations have started demanding the preservation of the environment and natural resources to avoid threatening life. As environmental protection and development come with associated costs, the role of the accounting profession emerges in addressing environmental problems by providing financial information related to the environment that proves useful for relevant parties in decision-making (Bicer & Darewi, 2019).…”

“…Research conducted by Agbo & Olufemi, ( 2022) shows that environmental accounting has a positive influence on the quality of financial reporting . Meanwhile, research conducted by Bicer & Darewi ( 2019) found that there was a statistically significant relationship between environmental costs and improving the quality of financial reports.…”