Caring
for the environment has assumed an important place in
the world culture. People from all walks of life, including
the corporate citizens, have become aware of the impacts
that pollution of air, ground and water can have on
the quality of life, the enjoyment of the earth's beauty,
and the physical well-being of its inhabitants. Because
of this, governments all over the globe have entered
the picture with laws and regulations that are intended
to correct and cure the effects of past violations of
good environmental practices, and which are designed
to prevent future violations of good environmental disciplines.
Accounting, being a social discipline, cannot thrive
in a vacuum. It has been enriched with various environmental
guidelines and standards in different corners of the
globe. By using environmental accounting as a strategic
weapon, companies can prosper by acquiring brand equity
and goodwill. To keep an efficient environmental accounting
system in place, the two major areas to be considered
are valuation vis-à-vis quantification of environmental
issues and control through proper environmental auditing.
This article brings out the major environmental auditing
issues and proper valuation of environmental perspectives
in order to achieve corporate social responsibility.
It
is apparent that the area of environmental auditing
is probably one of the most dynamic and important subjects
to come to the attention of the corporate world. It
is an area with which internal and external auditors,
and engineers as well as accountants must become familiar
to make their companies survive in the contemporary
world of competition. It is an enormous area under the
influence of companies, corporate stakeholders, environmental
protection organizations and departments of law and
justice at all levels of government in all the nations,
be it underdeveloped, developing or developed.
In
both accounting and auditing, quantification and valuations
become a primary issue. In measuring the cost of environmental
degradation and associated liabilities, some objective
and realistic basis is needed. In the US, both the Environmental
Protection Agency (EPA) and the Securities and Exchange
Commission (SEC) have strict requirements for disclosure.
Though the third world governments do not enforce many
regulations as far as environmental laws and reporting
are concerned, the urge to introduce environmental accounting
and auditing standards is being felt in most of these
countries. As a result of official responses to both
the Brundtland Commission (World Conference on Environment
and Development-WCED), in 1987 and the United Nations
Conference on Environment and Development in 1992 (the
`Earth Summit'), most governments have adopted sustainable
development as a national goal. An emerging debate is
about how economic sectors or businesses can contribute
to this objective. This has resulted in a number of
concepts such as `corporate sustainability' and `corporate
environmental responsibility' as well as a plethora
of proposals to monitor the progress being made towards
corporate sustainability. |
