Environmental cost accounting and auditing
April 28, 2008 by AROMAKE AFIEGBE | Filed under: 1-Environmental Valuation and Accounting, General, Literature Review
A history of the extension of traditional cost accounting systems to account for environmental impacts and their costs goes back toward the end of the 1970’s in Germany where rules were promulgated to calculate the business costs of environmental protection. This article looks at the flow- and decision-oriented perspective of environmental cost accounting as a supplement for the more process-oriented way of thinking of most companies such that a cause and effect analysis attributes correctly the costs of environmental impacts to their perpetrators. Environmental cost accounting shows the real costs of inputs and the business processes and ensures cost-efficient legal compliance.
Environmental audits examine the whole environmental management system in checking legal compliance and to find inefficiencies which can reduce both the amount of environmental impacts and cost.
