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Environmental Accounting and Reporting in Indian Public and Private Sector Companies: - Testing of hypothesis and analysis

of data.

CHAPTER 4

ENVIRONMENTAL ACCOUNTING AND REPORTING IN INDIAN PUBLIC AND PRIVATE SECTOR COMPANIES: -

TESTING OF HYPOTHESIS AND ANALYSIS OF DATA

This chapter comprises of two parts. In part one data of question no. 1-

6 of the questionnaire related to five core areas of environmental accounting

and reporting have been analyzed on the basis of the hypotheses using chi-

square test. Data on the rest of the questions of the questionnaire have been

analyzed and interpreted in the section two using comparative study on the

percentage based methods.

1) Hypothesis:-1

Ho: As far as environmental protection and management challenges

are concerned, there is no difference of opinion between public and private

sector Indian companies.

Ha: As far as environmental protection and management challenges

are concerned, there is difference of opinion between public and private

sector Indian companies.

165

TABLE-4.1

SIGNIFICANT CHALLENGES FACED BY BUSINESS FOR

ENVIRONMENTAL PROTECTION AND MANAGEMENT

Response Category Public Sector Private Sector

Percentage No. Percentage No.

(a) Strongly agree 53 77 58 67

(b) Moderately agree 12 17 21 24

(c) Moderately disagree 0 0 0 0

(d) Strongly disagree 0 0 0 0

No Response 4 06 8 09

Total 69 100 87 100

Q.1 Environmental protection and management is one of the most

important challenges faced by business these days?

(a) Strongly agree [ ]

(b) Moderately agree [ ]

(c) Moderately disagree [ ]

(d) Strongly disagree [ ]

Hypothesis Testing by Chi-Squire Test

Crosstabs

Case Processing Summary

156 100.0% 0 .0% 156 100.0%VAR00001 * VAR00002N Percent N Percent N Percent

Valid Missing Total

Cases

166

VAR00001 * VAR00002 Crosstabulation

Count

53 58 111

12 21 33

4 8 12

69 87 156

1.00

2.00

5.00

VAR00001

Total

1.00 2.00

VAR00002

Total

Chi-Square Tests

1.962a 2 .375

1.989 2 .370

1.349 1 .245

156

Pearson Chi-Square

Likelihood Ratio

Linear-by-LinearAssociation

N of Valid Cases

Value dfAsymp. Sig.

(2-sided)

0 cells (.0%) have expected count less than 5. Theminimum expected count is 5.31.

a.

In the given case the p value of X2 (Chi Square) for 2 d.f. is. 375.

Whereas α value of Chi Square at 5% level of significance is 0.5. That is, p

value is less than α value of Chi Square (p≤ α, result will be significant, it

means relation between two variables). Therefore we may have to accept the

null hypothesis that is, As far as environmental protection and management

challenges are concerned, there is difference of opinion between Indian public

and private sector Companies.

Hypothesis:-2

Ho: There is relation between ownership and the essentiality of

environmental accounting and reporting in Indian private sector companies.

Ha: There is no relation between ownership and the essentiality of

environmental accounting and reporting in Indian private sector companies.

167

TABLE – 4.2

SIGNIFICANCE OF ENVIRONMENTAL ACCOUNTING IN PUBLIC

AND PRIVATE SECTOR INDIAN COMPANIES


No. Percentage No. Percentage

(a) Extremely essential 6 09 6 7

(b) Very essential 48 70 51 59

(c) Moderately Essential 08 12 23 26

(d) Not very essential 0 0 0 0

(e) Not at all essential 0 0 0 0

(f) No Response 7 10 7 08

Total 69 100 87 100

Q.2 How essential would you think is for firms to ensure environmental

accounting and reporting?

(a) Extremely essential [ ]

(b) Very essential [ ]

(c) Moderately Essential [ ]

(d) Not very essential [ ]

(e) Not at all essential [ ]

Hypothesis Testing by Chi-Squire Test

Crosstabs



Valid Missing Total

Cases

168


Count

6 6 12

48 51 99

8 23 31

7 7 14

69 87 156

1.00

2.00

3.00

6.00

VAR00001

Total

1.00 2.00

VAR00002

Total

Chi-Square Tests

5.343a 3 .148

5.581 3 .134

.176 1 .675

156

Pearson Chi-Square

Likelihood Ratio


N of Valid Cases

Value dfAsymp. Sig.

(2-sided)

0 cells (.0%) have expected count less than 5. Theminimum expected count is 5.31.

a.

In the given case the p value of X2 (Chi Square) for 3 d.f. is .148.

Whereas the value of Chi Square at 5% level of significance is 0.5. That is, p

value is less than α value of Chi Square. Result will be significant; it means

relation between two variables). Therefore we may have to accept the null

hypothesis that there is relation between ownership and the essentiality of

environmental accounting and reporting for the private sector Indian

companies.

Hypothesis:-3

Ho: There is relation between ownership and the cost of environmental

accounting and reporting in Indian public and private sector companies.

169

Ha: There is no relation between ownership and the cost of

environmental accounting and reporting in Indian public and private sector

companies.

TABLE-4.3

SIGNIFICANCE OF COST OF ENVIRONMENTAL ACCOUNTING AND

REPORTING IN INDIAN PUBLIC & PRIVATE SECTOR COMPANIES

Response category Public Sector companies’ Private Sector companies

No. Percent No. Percent

(a) Very high 47 68 27 31

(b) High 13 19 42 48

(c) Low 0 0 8 09

(d) Very low 0 0 5 06

(e) No Response 09 13 5 06

Total 69 100 87 100

Q.3 What do you think the costs of environmental accounting and

reporting would inevitably be?

(a) Very high [ ]

(b) High [ ]

(c) Low [ ]

(d) Very low [ ]

170

Hypothesis Testing by Chi-Squire Test:-

Crosstabs



Valid Missing Total

Cases


Count

47 27 74

13 42 55

8 8

5 5

9 5 14

69 87 156

1.00

2.00

3.00

4.00

5.00

VAR00001

Total

1.00 2.00

VAR00002

Total

Chi-Square Tests

33.204a 4 .000

38.665 4 .000

3.387 1 .066

156

Pearson Chi-Square

Likelihood Ratio


N of Valid Cases

Value dfAsymp. Sig.

(2-sided)

4 cells (40.0%) have expected count less than 5. Theminimum expected count is 2.21.

a.


Whereas the α value of Chi Square at 5% level of significance is 0.5. That is, p

value is less than α value of Chi Square. Result will be significant it means

relation between two variables). Therefore we may have to accept the null

hypothesis that there is relation between ownership and the cost of

171

environmental accounting and reporting in Indian public and private

companies.

Hypothesis:-4

Ho: There is no significant difference between attitude of private and

public sector Indian companies as regards the nature of disclosure of

environmental accounting and reporting.

Ho: There is significant difference between attitude of private and public

sector Indian companies as regards the nature of disclosure of environmental

accounting and reporting.

TABLE – 4.4

NATURE OF DISCLOSURE OF ENVIRONMENTAL ACCOUNTING

AND REPORTING IN INDIAN PUBLIC & PRIVATE SECTOR

COMPANIES



(a) Quantitative only 06 09 07 08

(b) Qualitative only 05 07 06 07

(c) Both 51 74 69 79

(d) No response 07 10 05 06

Total 69 100 87 100

Q.4 In your opinion what should be the nature of disclosure of

environmental accounting and reporting?

(a) Quantitative only [ ]

172

(b) Qualitative only [ ]

(c) Both [ ]


Crosstabs



Valid Missing Total

Cases


Count

6 7 13

5 6 11

51 69 120

7 5 12

69 87 156

1.00

2.00

3.00

4.00

VAR00001

Total

1.00 2.00

VAR00002

Total

Chi-Square Tests

1.139a 3 .768

1.132 3 .769

.063 1 .801

156

Pearson Chi-Square

Likelihood Ratio


N of Valid Cases

Value dfAsymp. Sig.

(2-sided)


a.



value is larger than the value of Chi Square. Result will be not significant; it

means no relation between two variables). Therefore we may have to accept

173

the alternate hypothesis that is no significant difference between attitude of

private and public sector Indian companies as regards the nature of disclosure

of environmental accounting and reporting.

Hypothesis:-5

Ho: There is relation between ownership and attitude as regards

periodicity of reporting of environmental accounting and reporting in the

public and private sector Indian companies.

Ho: There is no relation between ownership and attitude as regards

periodicity of reporting of environmental accounting and reporting in the

Indian public and private sector companies.

TABLE – 4.5

PERIODICITY OF REPORTING



(a) Monthly 5 7 5 06

(b) Quarterly 7 10 5 06

(c) Half yearly 6 09 9 10

(d) Yearly 45 65 61 70

(e) If any other (please specify) 0 0 0 0

No response 6 09 7 08

Total 69 100 87 100

Q.5 What is the periodicity of reporting?

(a) Monthly [ ]

(b Quarterly [ ]

174

(c) Half yearly [ ]

(d)

Yearly [ ]

(e)If any other (please specify)

……………………………….………………………

………………………………………………………


Crosstabs



Valid Missing Total

Cases


Count

5 5 10

7 5 12

6 9 15

45 61 106

6 7 13

69 87 156

1.00

2.00

3.00

4.00

6.00

VAR00001

Total

1.00 2.00

VAR00002

Total

Chi-Square Tests

1.367a 4 .850

1.359 4 .851

.330 1 .565

156

Pearson Chi-Square

Likelihood Ratio


N of Valid Cases

Value dfAsymp. Sig.

(2-sided)


a.

175



value is larger than the value of Chi Square (α). Result will be not significant;

it means no relation between two variables). Therefore we may have to accept

the alternate hypothesis that is no relation between ownership and attitude as

regards periodicity of reporting of environmental accounting & reporting in

the public and private sector Indian companies.

Hypothesis:-6

Ho: There is significant difference between attitude of private and public

sector Indian companies as regards auditing of environmental accounting and

reporting of public and private sector Indian companies.

Ha: There is no significant difference between attitude of private & public

sector Indian companies as regards auditing of environmental accounting and

reporting of public and private sector Indian companies.

TABLE – 4.6

ESSENTIALITY OF ENVIRONMENTAL AUDITING FOR BETTER

ENVIRONMENTAL ACCOUNTING AND REPORTING IN INDIAN

PUBLIC &PRIVATE SECTOR COMPNIES

Response category Public Sector companies’ Private Sector companies No. Percent No. Percent

(a) Mandatory 00 00 00 00 (b) Extremely essential 05 07 00 00 (c) Very essential 35 51 43 49 (d) Fairly essential 05 07 19 23 (e) Not very essential 00 00 09 10

176

(f) Not at all essential 00 00 00 00 (g) No Response 24 35 16 18 Total 69 100 87 100

Q.6 How essential would you think is for firms to pursue environmental

auditing better environmental accounting and reporting?

(a) Mandatory [ ]

(b) Extremely essential [ ]

(c) Very essential [ ]

(d) Fairly essential [ ]

(e) Not very essential [ ]

(f) Not at all essential [ ]


Crosstabs



Valid Missing Total

Cases


Count

5 5

35 43 78

5 19 24

9 9

24 16 40

69 87 156

2.00

3.00

4.00

5.00

7.00

VAR00001

Total

1.00 2.00

VAR00002

Total

177

Chi-Square Tests

22.814a 4 .000

28.467 4 .000

.694 1 .405

156

Pearson Chi-Square

Likelihood Ratio


N of Valid Cases

Value dfAsymp. Sig.

(2-sided)


a.

In the given case the p value of X2 (Chi Square) for 4 d.f. is.000. Whereas

the α value of Chi Square at 5% level of significance is 0.5. That is, p value is

less than the α value of Chi Square. Result will be significant; it means relation

between two variables). Therefore we may have to accept the null hypothesis

that is significant difference between attitude of private and public sector

Indian company as regards auditing of environmental accounting and

reporting.

TABLE -4.7

IMPORTANT COMPONENTS OF ENVIRONMENT CONCERNED WITH

ITS SURROUNDINGS FOR PUBLIC AND PRIVATE SECTOR INDIAN

COMPANIES

Response about Air, Water, Land, Flora, Fauna and Non renewable resources such as

fossil fuels and minerals.

No. Percent No. Percent No. Percent No. Percent No.

Percent No. Percent

178

PUBLIC SECTOR INDIAN COMPANIES

Yes 69 100 69 100 69 100 58 84 53 76 47 68

No 0 0 0 0 0 0 4 06 8 12 06 09

No Respond0 0 0 0 0 0 7 10 8 12 13 19

Total 69 100 69 100 69 100 69 100 69 100 69 100

PRIVATE SECTOR INDIAN COMPANIES

Yes 87 100 87 100 87 100 83 95 77 88 74 85

No 0 0 0 0 0 0 0 0 6 07 06 07

No Response 0 0 0 0 0 0 4 05 4 05 07

08

Total 87 100 87 100 87 100 87 100 87 100 87 100

Q.7 Do you agree that the business environment is concerned with its

surroundings and includes?

(a) Air [ ]

(b) Water [ ]

(c) Land [ ]

(d) Flora [ ]

(e) Fauna [ ]

(f) Non-renewable resources such as fossil fuels and minerals. [ ]

The above Table shows that all the public companies 69 (100%) have shown

consensus over the significance of air, water, and land as the important

environmental components surrounding them. In case of flora, 58 (84%)

179

public companies agreed with its significance as an important environmental

factor while 7 (approx.10%) gave no response. About 53 (77%) companies

considered fauna to be little less significant environmental factor whereas 8

(11%) discarded it to be a relevant environmental factor and 8 (11%) not

answered. A majority of public companies, 47 (68%) believed that non-

renewable resources such as fossil fuel and minerals are the significant

environment factors. 6 (9%) public companies are in favour of the non

renewable resources as environmental components and 13 (18%) not

responded.

Similarly, in case of private companies, 87 (100%) also agreed with the

significance of air, water and land as being the environmental components. 83

(95%)private companies gave a positive response about the significance of

flora as one of the environmental factors. While 6 (7%) did not answer. In case

of fauna 77 (88%) companies take into account as an important environmental

component and 6 (7%) companies consider it to be a less important factor of

the environment. 4 (5%) companies not responded at all. Non–renewable

resources such as fossil, fuels and minerals are also believed to be equally

important environmental components as 74 (85%) private companies

responded in an affirmative manner. 6 (8%) did not favour it and 9 (8%)

companies gave no answer.

From the above data it is obvious that in case of air, land and water both

public and private sector companies have slightly different views. The

180

difference is meager in terms of percentage and there is no significant

difference in the opinion of both public and private sector Indian companies.

TABLE – 4.8

COMPONENT OF DEFINITION OF ENVIRONMENTAL ACCOUNTING

AND REPORTING

Components Public Sector Companies Private Sector Companies

No Percentage No Percentage

(a) Identification of environmental costs 1 1 3 3

(b) Measurement of environmental costs 0 0 2 2

(c) Disclosure of environmental costs 1 1 0 0

(d) Benefits, assets and liabilities related to environmental accounting. 2 03 3 3

(e) All the above 54 78 69 80

(f) No Response 11 16 10 12

Total 69 100 87 100

Q.8 In your opinion environmental accounting has been defined as.

(a) Identification of environmental costs, [ ]

(b) Measurement of environmental costs, [ ]

(c) Disclosure of environmental costs, [ ]

(d) Benefits, assets and liabilities related to environmental

accounting. [ ]

(i) Do you agree with the definition? [ ]

(ii) If your answer is no, kindly give a suitable definition?

181

……………………………………………………………………………………

……………………………………………………………………………………

……………………………………………………………………………………

As far as public sector is concerned, 1 (1%) of the public sector company

reported that the identification of environmental costs is an important part of

the definition of environmental accounting and reporting system in Indian

companies. In case of measurement of environmental costs as the only

important aspect of the definition of environmental accounting and reporting

system in Indian public sector companies none of them are in favour of it. In

case of Disclosure of environmental costs as an important part of definition of

environmental accounting and reporting system in Indian public sector

companies only 1 (1%) company favoured it. While in case of Benefits, assets

and liabilities related to environmental accounting as an important part of

definition of environmental accounting and reporting system in Indian public

sector, only 2 (3%) companies are in favour of it. Whereas regarding all the

components together as an important part of definition of environmental

accounting and reporting system in Indian public sector companies, majority

of companies such as 54 (78%) agreed. While, 11(15%) public companies gave

no response.

Similarly, in case private sector Indian companies, 3 (3%) of companies

treated the Identification of environmental costs as an important part of

definition of environmental accounting and reporting system. In case of

182

Measurement of environmental costs as an important part of definition of

environmental accounting and reporting system in Indian private sector

companies only 2 (2%) are in favour of it. Regarding disclosure of

environmental costs as an important part of definition of environmental

accounting and reporting system in Indian private sector companies none of

them preferred for it. While about benefits, assets and liabilities related to

environmental accounting as an important part of definition of environmental

accounting and reporting system only 3 (3%) companies agreed. whereas

including the above components together as an important part of definition of

environmental accounting and reporting system in Indian private sector

companies, majority of companies such as 69 (79%) companies are in favour

of it. While, 10 (11%) public companies did not give any response.

It is therefore evident that a large group of the public and private sector

Indian companies are in favour of all the above components together as an

important part of definition of environmental accounting and reporting

system. Therefore there is no significant difference in the opinion of public

and private sector companies about the various components of definition of

environmental accounting and reporting system.

183

TABLE:-4.9

PROBLEMS IN IMPLEMENTING ENVIRONMENTAL ACCOUNTING

AND REPORTING

Problems Public Sector Companies Private Sector Companies


(a) The problem of changing prices. 7 10 9 10

(b) The problem of developing the required technology. 4 06 5 06

(c) The problem of justifying increased costs of environmental accounting and reporting programmes to the shareholders. 6 9 6 07

(d) Difficulty is adjusting to legal requirements. 3 04 3 03

(e) Other (please specify) 0 0 0 0

(f) All above 41 59 53 61

(g) No responded 8 12 11 13

Total 69 100 87 100

Q.9 Does your company encounter any of the following problems in

implementing environmental accounting and reporting?

(a) The problem of changing prices. [ ]

(b) The problem of developing the required technology. [ ]

(c) The problem of justifying increased costs of environmental

accounting and reporting programmed to the shareholders. [ ]

(d) Difficulty is adjusting to legal requirements. [ ]

(e) Other please specifies

………………………………………………………………………

………………………………………………………………………

184

Table 9 depicts the problems faced in implementing environmental

accounting and reporting. In public sector, 7 (10%) companies pointed out the

problem of changing prices as a hurdle in implementing Environmental

Accounting and Reporting , 4 (6%) of the companies showed the problem of

developing the required technology as a barrier in implementing

environmental accounting and reporting. 6 (9%) public sector companies felt

that the issue of justifying increased costs of environmental accounting and

reporting programmes to the shareholders creates problem in implementing

environmental accounting and reporting. 3 (4%)of public sector companies

found difficulties in adjusting to legal requirements .The larger number i.e. 41

public sector companies (60 %) encountered all of the above problems in

varying degrees of severity in implementing environmental accounting and

reporting. 8 (12% )did not respond about the problems of environmental

accounting and reporting. These are mostly from the lots which have not

responded in previous table too.

On the other hand nearly an equal percentage of private companies like

public companies i.e. 9 (10%), felt the problem of the changing prices in

implementing environmental accounting and reporting. 5 private companies

(6%) reported the problem of developing the required technology as barrier in

implementing the environmental accounting and reporting while 6 (7%)

private companies faced with the problem of justifying increased costs due to

the implementation of environmental accounting and reporting program as a

big problems in environmental accounting and reporting. 3 (4%) companies

185

pointed out the difficulty in adjusting to legal requirements as a problem of

environmental accounting and reporting. An aggregate of 53 of the sample

(62%) felt that all of the above factors as significant problems in

Environmental Accounting and Reporting. 11 (13%) did not respond about

the problem they faced in implementing environmental accounting and

reporting. There is no significant difference in the opinion of public and

private sector companies when it comes to problems in implementing

environmental accounting and reporting in public and private sector

companies.

TABLE:-4.10

USE OF FORMAL ENVIRONMENTAL ACCOUNTING AND

REPORTING SYSTEM

Response Category Public Sector Companies Private Sector Companies


Yes 0 0 0 0

No 60 87 81 93

No response 09 13 06 07

Total 69 100 87 100

Q.10. Do you have a formal environmental accounting and reporting

system? [ ]

Not even a single public out of 69 no even single company is having any

formal environmental accounting and reporting system and 60 (87%)

companies are not in much favour of it and 09 (13%) companies did not

186

respond about the use of formal environmental accounting and reporting

system.

Similarly, out of 87 private companies, none of them is having formal

environmental accounting and reporting system and 81 (98%) companies

were not in favour of it. Whereas 6 (5%) private companies did not respond

about the use of formal environmental accounting and reporting system in

Indian private sector companies.

It is, therefore obvious that a large number of the Indian public and

private sector companies are not in favor of formal environmental accounting

and reporting system. There is no significant difference in the opinion of

public and private sector companies about the availability of formal

environmental accounting and reporting system in Indian public and private

sector companies.

TABLE – 4.11 PERSON RESPONSIBLE FOR ENVIRONMENTAL ACCOUNTING AND

REPORTING (EAR) IN INDIAN PUBLIC & PRIVATE SECTOR COMPANIES



(a) Internal Accounts 05 07 08 09

(b) Chartered Accountants 33 48 59 68

(c) Shareholders 0 0 0 0

(d) Chief Executive officers 07 10 06 07

(e) Directors 11 16 04 04

(f) Board of Directors. 06 09 05 06

(g) No response 07 10 05 06

Total 69 100 87 100

187

Q.11 If yes which of the following in your company is responsible for


(a) Internal Accounts [ ]

(b) Chartered Accountants [ ]

(c) Share holders [ ]

(d) Chief Executive officers [ ]

(e) Directors [ ]

(f) Board of directors. [ ]

Table 11 attempts to identify people responsible for environmental


In public sector, 5 (7%) companies reported that Internal Accountants are

more responsible for Environmental Accounting and Reporting. A good

number of public sector companies, 33 (48%) felt that Chartered Accountants

should be accountable for environmental accounting and reporting, whereas

none of the public sector companies held shareholders responsible for

Environmental Accounting and Reporting . 7 (10%) of the public sector

companies reported that chief Executive officers are authorized for

Environmental Accounting and Reporting while 11 (16%) companies feel that

Individual Directors are answerable for it. 6 (9 %) companies recommended

that board of directors should be responsible for Environmental Accounting

and Reporting . Nearly 7 (10%) did not respond about the responsibility of

188

Environmental Accounting and Reporting. These are mostly from the lot

which has not answered in the previous query too.

11 (13%) and 57 (66%) private sector companies reported that Internal

accountants and Chartered Accountants respectively are accountable for

environmental accounting and reporting. None of the private sector

companies reported that shareholders are authorized for environmental

accounting and reporting. 6 (7%) private sector companies considered Chief

Executive to be in charge for Environmental Accounting and Reporting,

whereas 3 (3%) reported that individual directors should be responsible for

environmental accounting and reporting. 6 (7%) reported that board of

directors are to be answerable for Environmental Accounting and Reporting.

5 (6%) did not respond.

Obviously, there is insignificant difference in the opinion of public and

private sector companies in identifying the person to be made responsible for

task of Environmental Accounting and Reporting.

TABLE – 4.12 THE MAIN CAUSES FOR NOT HAVING FORMAL ENVIRONMENTAL

ACCOUNTING AND REPORTING SYSTEM



(a) Not an area of interest 0 0 0 0

(b) Lack of clear-cut govt. policy on the issue 10 15 15 17

(c) Lack of accounting standards. 35 51 50 06

189

(d) Voluntary nature of environmental accounting 05 07 05 06

(e) Difficulty in measuring and defining environmental cost and benefits. 03 04 08 09

(f) Expensive 07 10 02 02

(g) Time consuming 0 0 0 0

(h) Not required by law 09 13 03 03

(i) Difficulty in measuring 0 0 0 0 environmental information

(j) Not useful in decision-making 0 0 0 0

(k) Any other (please specify) 0 0 0 0

(l) Not Responded 0 0 04 04

Total 69 100 87 100

Q.12 If no, the main causes for no formal environmental accounting and

reporting system in your financial statements are?

(a) Not an area of interest [ ]

(b) Lack of clear-cut govt. policy on the issue [ ]

(c) Lack of accounting standards. [ ]

(d) Voluntary nature of environmental accounting [ ]

(e) Difficulty in measuring and defining environmental cost and

benefits. [ ]

(f) Expensive [ ]

(g) Time Consuming [ ]

(h) Not required by law [ ]

190

(i) Difficulty in measuring environmental information [ ]

(j) Not useful in decision making [ ]

(k) Any other (please specify)

……………………………………………

…………………………............................

Table 12 depicts the main causes for not having formal environmental

accounting and reporting system.

None of the public sector companies found environmental accounting

and reporting, an area of interest as one of the main causes for not having

formal environmental accounting reporting system in financial statements

and 10 (14%) companies agreed with the reason of lack of clear-cut

government policy on formal environmental accounting and reporting system

while 35 (51%) found lack of accounting standards responsible for non use of

formal Environmental Accounting and Reporting. Whereas 5 (7%) companies

felt that voluntary nature of environmental accounting as one of the causes for

no formal Environmental Accounting and Reporting. While 3 (4%) companies

faced difficulty in measuring and defining environmental cost and benefits as

the causes for the absence of formal environmental accounting and reporting.

Whereas 2 (3%) companies indicated that the expensiveness is the main cause

for not having formal environmental accounting and reporting system. No

one has regarded the time factor as being cause of concern. 9 (13%) companies

thought that it is not required as per law. 5 (7%) companies are of the opinion

that difficulty in measuring the environmental information is also responsible

191

for no formal environmental accounting and reporting system. Not even a

single company thinks that it is not useful in decision-making at all.

Similarly, No private company i.e. 0 (0%) found environmental

accounting and reporting , not an area of interest as one of the main causes

for no formal environmental accounting reporting system in financial

statements and 15 (17%) companies agreed with the reason of lack of clear cut

government policy is reason for no formal environmental accounting and

reporting system. 50 (57%) held lack of accounting standards responsible for

non use of a formal Environmental Accounting and Reporting , and 5 (6%)

regarded Voluntary nature of environmental accounting another cause for not

using a formal Environmental Accounting and Reporting system . While 8 (9

%) showed difficulty in measuring and defining environmental cost and

benefits as another cause for non formal environmental accounting and

reporting. 2 (3%) regarded expensiveness as another cause for no formal

environmental accounting and reporting system. Any of them has not found

that the time factor as the significant cause of non use of Environmental

Accounting and Reporting while 3 (3%) companies think that it is not

required by the law. 2 (2%) companies think that difficulty in measuring the

environmental information is also an important cause for no formal

environmental accounting and reporting system. No company thinks that it is

not useful in decision-making.

Significantly both the Public and private sector Indian companies one of

the opinion that lack of accounting standards is one of the main causes for not

192

having formal environmental accounting and reporting system. There is no

significant difference in the opinion of public and private sector Indian

companies about the other causes as concluded in this question for not

having formal environmental accounting and reporting system.

TABLE:-4.13

ORGANISATIONAL STRUCTURE FOR ENVIRONMENTAL

ACCOUNTING AND REPORTING IN INDIAN PUBLIC & PRIVATE

SECTOR COMPANIES

Response (a) A post of (b) Separate (c) A committee (d) Management (e) Any other

Category corporate department to monitor whereby arrangement environmental

company’s corporate (please specify officer environmental. environmental

responsibility accounting and activities reporting forms part of the executive work.

No. Percent No. Percent No. Percent No. Percent No.

Percent

PUBLIC SECTOR INDIAN COMPANIES

Yes 15 22 15 22 35 51 02 03 02 03

No 30 43 35 51 20 29 30 43 35 51

Not Response 24 35 19 28 14 20 37 54 32 46

Total 69 100 69 100 69 100 69 100 69 100

PRIVATE SECTOR INDIAN COMPANIES

Yes 30 34 20 23 40 46 10 11 02 02

No 25 29 30 34 25 29 30 34 40 46

Not Response 32 37 37 43 22 25 47 54 45 52

Total 87 100 87 100 87 100 87 100 87 100

193

Q.13 Have any of the following creation been made by you in

the organizational structure to accommodate corporate


(a) A post of corporate environmental officer [ ]

(b) Separate department. [ ]

(c) A committee to monitor company’s environmental

responsibility activities. [ ]

(d) Management where by corporate environmental

accounting and reporting forms part of the executive work.

[ ]

(e) Other arrangement please specify

………………………………………………………………

……………………………………………………………...

Above analyses need to accommodate in the organizational structure the

corporate environmental accounting and reporting activities in Indian public

and private sector companies. 9 (15%) Indian public sector companies are in

favour of a post of corporate environmental officer for environmental

accounting and reporting, while 30 (43%) companies are not in favour of it

and 24 (35%) companies did not respond. Regarding a separate department in

the organizational structure to accommodate corporate environmental

accounting and reporting in Indian public sector companies, 15 (35 %) desired

it. Whereas 35 (51%) companies opposed It. 19 (28%) companies did not

respond. In case of a committee to monitor company’s environmental

194

responsibility activities, 35 (51%) companies favoured it and 20 (29%)

companies did not want it. 14 (20%) companies gave no response .In case of

Management where by corporate environmental accounting and reporting

forms part of the executive work, 2 (3%) companies are are in favour of it

while 30 (43%) companies discarded it and 37 (54%) companies did not

respond. About other arrangements for the organizational structure to

accommodate corporate environmental accounting and reporting, 2 (3%)

agreed while 35 (51%) did not agree and 32 (46%) companies did not respond

for it.

In case of private sector companies 30 (34%) companies are in favour of a

post of corporate environmental officer for environmental accounting and

reporting, while 25 (29%) companies did not favour it and 32 (37%)

companies gave no response. For having a separate department in the

organizational structure to accommodate corporate environmental accounting

and reporting. 20 (23 %) companies favoured it. Whereas 30 (29%) companies

did not want it and 37 (54%) companies gave no response. In case of a

committee to monitor company’s environmental responsibility activities, 40

(46%) companies are in favour of it. While 25 (29%) companies opposed it and

22 (25%) companies made no comment. In case of Management, where

corporate environmental accounting and reporting forms part of the executive

works, 10 (11%) companies desired it. While 30 (29%) companies discarded it

and 47 (54%) companies gave no comment about a committee to monitor

company’s environmental responsibility activities. 11 (13%) about other

195

arrangement in the organizational structure to accommodate corporate

environmental accounting and reporting, 2 (2%) agreed while 40 (46%)

opposed and 45 (52%) companies not responded for it.

Therefore it can be concluded that a large number of the public and

private sector Indian companies are in favour of a committee to monitor

company’s environmental responsibility activities in organizational structure

to accommodate corporate environmental accounting and reporting. There is

no significant difference in the opinion of public and private sector Indian

companies about the organizational structure to accommodate corporate


TABLE - 4. 14

BENEFICIALITY OF ADAPTATION OF ENVIRONMENTAL

ACCOUNTING AND REPORTING



yes 65 94 70 80

No 0 0 5 06

Not Response 4 06 12 14

Total 69 100 87 100

Q.14 Is adaptation of environmental accounting and reporting

beneficial? [ ]

Table 14 indicates the beneficialy of adaptation of environmental


196

So far as public sector companies are concerned, 65 (94%) companies

found of adaptation of environmental accounting and reporting beneficial.

Whereas none of them discarded it and 4 (6%) companies did not respond

In case of private sector companies, 70 (80%) agreed with the benefits of

adaptation of environmental accounting and reporting. While, 5 (6%)

companies disagreed and 12 (14%) private companies expressed no opinion

about the beneficiality of adaptation of environmental accounting and

reporting in Indian private sector companies.

It is therefore obvious that a large number of the public and private

sector Indian companies found adaptation of environmental accounting and

reporting quite beneficial as there is no significant difference in the opinion of

public and private sector companies about the beneficiality of adaptation of


companies.

TABLE -4. 15

USEFULNESS OF ENVIRONMENTAL COST INFORMATION FOR

BETTER MANAGERIAL DECISION-MAKING

Response category Public Sector companies Private Sector companies

No. No Percentage No

(a) Cost reductions 15 22 20 21.74

(b) Appraisal of investments for environmental risks 20 29 30 34.48

(c) Evaluation of environmental performance of a company 10 14 30 17.24

197

(d) Designing various processes using environmental friendly technologies 04 06 9.2

(e) Providing better estimates of total cost of producing a product. 02 03 8 5.74

(f) Pricing of the products. 01 01 5 2.30

(g) Profitability. 05 07 2 2.30

(h) Competitive advantages. 08 12 2

(i) Compliance with environmental laws. 0 3 3.45

(j) If any other (Please specify). 04 06 0 0

Not Responded 0 0 2 2.30

Total 69 100 87 100

Q.15 If yes, do you think that environmental cost information generated by

environmental accounting will be useful for better managerial decision

relating to,

(a) Cost reductions [ ]

(b) Appraisal of investments for environmental risks [ ]

(c) Evaluation of environmental performance of a company [ ]

(d) Designing various processes using environmental friendly

technologies [ ]

(e) Providing better estimates of total cost of producing a product.[ ]

(f) Pricing of the products. [ ]

(g) Profitability. [ ]

(h) Competitive advantages. [ ]

(i) Compliance with environmental laws. [ ]

(j) If any other (Please specify). [ ]

198

……………………………………………………………

……………………………………………………………

So far as public sector companies are concerned, 15 (22%) companies

considered cost reduction useful for environmental cost information for better

managerial decision making. While 20 (15%) companies regarded appraisal of

investments for environmental risks quite significant environmental cost

information for better managerial decision making. In case of evaluation of

environmental performance of companies only 20 (29%) companies are

desired it, while in case of designing various processes using environmental

friendly technologies only 4 (6%) companies wanted it, and only 2 (3%)

companies agreed that environmental cost information is useful for pricing of

products and only 1 (1%) company agreed with the profitability and 5 (7%)

companies with competitive advantages and 8 (12%) companies found

compliance with environmental laws useful environmental cost information

for better managerial decision making. Only 4 (6%) companies did not

respond about the usefulness of environmental cost information for better

managerial decision making in public sector Indian companies.

In case of private sector companies 20 (23%) companies considered cost

reduction as useful environmental cost information for better managerial

decision-making. While 30 (34%) companies regarded appraisal of

investments for environmental risks useful for the environmental cost

information for better managerial decision-making. In case of evaluation of

environmental performance of companies only 15 (17%) companies favoured

199

it, while about designing various processes using environmental friendly

technologies, only 8 (9%) companies are satisfied with it. while only 5 (6%)

companies found environmental cost information useful for pricing of

products and only 2 (2%) companies agreed with profitability and 2 (2%)

companies with competitive advantages and 3 (3%) agreed with compliance

with environmental laws. Only 2 (2%) companies did not comment on the

usefulness of environmental cost information for better managerial decision

making.

Therefore no significant difference in the opinion of public and private

sector Indian companies about the usefulness of environmental cost

information for better managerial decision making in public and private

sector Indian companies is observed.

TABLE – 4.16

STATEMENT IN THE COMPANY POLICY RELATING ESPECIALLY TO


PUBLIC & PRIVATE SECTOR COMPNIES

Response category Public Sector Companies Private Sector Companies


Yes 02 03 0 0

No. 60 87 85 98


Total 69 100 87 100

200

Q 16 Is there a statement in the company policy relating especially to

environmental accounting and reporting? [ ]

So far as public sector companies are concerned, only 2 (2%) companies

are in favour of the statement in the company policy relating especially to

environmental accounting and reporting. While 60 (87%) companies are not in

favour of it and 7 (10%) companies did not respond.

In case of private sector companies, none out of 87 is in favour of the

statement in the company policy relating especially to environmental

accounting and reporting. While 85 (98%) companies are not in favour of it

and 2 (2%) private companies did not respond


sector Indian companies are not in favour of the statement in the company

policy relating especially to environmental accounting and reporting in

companies.

TABLE -4. 17

MONITORING OF ENVIRONMENTAL ACCOUNTING AND

REPORTING

Response Management Unions Government Social auditors Accountants Others category No. Percentage No.PercentageNo.PercentageNo.PercentageNo. Percentage No.Percentage

PUBLIC

Yes 40 58 5 07 45 65 25 36 20 29 2 03

No 25 36 45 66 20 29 30 43 35 51 60 87

Not Response04 06 19 27 04 06 14 20 14 20 07 10

201

Total 69 100 69 100 69 100 69 100 69 100 69 100

PRIVATE

Yes 60 69 10 11 40 46 30 34 35 40 2 02

No 20 23 60 69 30 34 20 23 25 29 80 92

No Response 07 08 17 20 17 20 37 43 27 31 05 06

Total 87 100 87 100 87 100 87 100 87 100 87 100

.17 Who should monitor environmental accounting and reporting?

(a) Management. [ ]

(b) Unions. [ ]

(c) Government. [ ]

(d) Social auditors. [ ]

(e) Accountants. [ ]

(f) Other please specify [ ]

……………………………………………………………………

………………………………………………………………………

Regarding monitoring of environmental accounting and reporting in

public sector companies are concerned, 40 (48%) companies preferred

management while 25 (36%) companies discarded it and 4 (6%) companies

not responded. In case of unions, 5 (7%) agreed with it whereas 45 (65%)

companies did not consider Unions as responsible for monitoring the

environmental accounting and reporting in the public sector Indian

companies and 29 (42%) gave no response. 45 (65%) favoured Government

while 20 (29%) companies did not consider it accountable for monitoring the

environmental accounting and reporting and 4 companies (6%) not responded

the query. About social auditors, 25 (36%) companies prefer it and 30

202

companies (44%) rejected and 14 companies (21%) not responded. Similarly in

case of accountants, 20 (29%) public companies considered them quite

appropriate and 35 companies ( 51%) disagreed. 14 companies (20%) gave no

opinion about accountants for monitoring the environmental accounting and

reporting.

In case of Indian private sector companies, 60 (69%) companies

considered management responsible for monitoring environmental

accounting and reporting and 20 (21%) companies disagreed with it. While 7

(8%) not responded. 10 (11%) companies held Unions responsible for

environmental accounting and reporting whereas 60 (69%) companies

discarded it, and 17(20%) companies not responded. Regarding government,

40 (46%) companies considered it to be appropriate for monitoring

environmental accounting and reporting while 30 (34%) disagreed for and 17

(20%) Indian private companies made no comment on responsibility for

monitoring the environmental accounting and reporting. While, 30 (34%)

companies found social auditors responsible for environmental accounting

and reporting while 20 (23%) companies disagreed and 37 (43%) not

responded. 35 (40%) private sector companies considered accountants

responsible for monitoring the environmental accounting and reporting.

While 25 (29%) companies agreed with it and 27 out of 87 (31%) gave no

opinion about accountants responsibility for monitoring the environmental


203

TABLE -4. 18

FORMAL ENVIRONMENTAL ACCOUNTING & REPORTING

AWARENESS TRAINING PROGRAMMES FOR EMPLOYEES IN PUBLIC

AND PRIVATE SECTOR INDIAN COMPANIES



Yes 0 0 0 0

No. 65 94 84 97


Total 69 100 87 100

Q.18. Does your company have a formal Environmental

Accounting and Reporting awareness training programmed

for your employees? [ ]

In case of public sector companies, out of 69 no company is having a formal

Environmental Accounting and Reporting awareness training programmes

for employees. Whereas 65 out of 69 (94%) companies indicated it as a lapse

and 04 (6%) companies not responded.

On the other hand, out of 87 no private sector company is having a

formal Environmental Accounting and Reporting awareness training

programmes for employees. While 84 (97%) companies pointed out as a

shortcoming and 3 (3%) private companies did not respond.

There is no significant difference in the opinion of public and private

sector companies about the formal Environmental Accounting and Reporting

awareness training programme for employees. Therefore that a large number

204

of the public and private sector Indian companies considered it a major lapse

in the respect of formal Environmental Accounting and Reporting awareness

training programmes for employees in Indian public and private sector

companies.

TABLE – 4.19

METHODS FOR ENVIRONMENTAL ACCOUNTING AND REPORTING

AWARENESS TRAINING PROGRAMMED

FOR EMPLOYEES INDIAN PUBLIC & PRIVATE SECTOR COMPANIES



(a) Companies seminar 07 10 06 08

(b) Workshop 05 07 10 11

(c) External faculty 05 07 10 11

(d) On the job 42 62 42 48


Total 69 100 87 100

Q. 19 If yes, by whom?

(a) Companies seminar [ ]

(b) Workshop [ ]

(c) External faculty [ ]

(d) On the job [ ]

205

So far as public sector companies are concerned, 07 (10%) Companies

considered seminar as an effective mode of formal Environmental Accounting

and Reporting awareness training programme for employees. 5 (7%)

companies found Workshops and 5 (7%) companies preferred External

faculty, 42 (61%) companies are in favour of on the job mode of formal

Environmental Accounting and Reporting awareness training programme

and 10 (14%) companies made no comment.

In case of private sector companies, 6 (7%) found seminar as a good mode

of formal Environmental Accounting and Reporting awareness training

programmes for employees. 5 (6%) companies preferred Workshops and 5

(6%) companies agreed with External faculty. 60 (69%) companies considered

on the job mode of formal Environmental Accounting and Reporting

awareness training programmed for employees effective and 11 (13%)

companies gave no opinion about it.

No significant difference in the opinion of public and private sector

Indian companies about the proper mode for formal Environmental

Accounting and Reporting awareness training programme has been found as

a large number of the public and private sector Indian companies are in

favour of on the job mode for formal Environmental Accounting and

Reporting awareness training programmes for employees in public and

private sector Indian companies.

206

TABLE – 4.20

APPLICATION OF ANY SPECIAL NORMS FOR ENVIRONMENTAL


SECTOR COMPANIES IN THE LIGHT OF LIBERALISATION



Yes 0 0 0 0

No 63 91 84 97


Total 69 100 87 100

Q. 20 Have you introduced any special norms for environmental

accounting and reporting in the light of liberalization if yes

please specify.

……………………………………………………………………

………………………………………………………….

No public sector company out of 69 is in favour of special norms for

environmental accounting and reporting in the light of liberalization. 63 (91%)

companies disagreed it and 6 (9%) companies gave no response.

Whereas, out of 87 private sector companies no company favoured the

availability of special norms for environmental accounting and reporting in

the light of liberalization and 84 (97%) companies discarded it and 3 (3%)

private companies did not respond.

Therefore it is obvious that a large number of public and private sector

Indian companies have not favoured adoption of special norms for

environmental accounting and reporting in the light of liberalization as there

207

is no significant difference in the opinion of public and private sector

companies on the availability of special norms for environmental accounting

and reporting in the light of liberalization.

Table 21 depicts the specified budget allocation for the environmental


TABLE – 4.21

SPECIFIED BUDGET ALLOCATION FOR THE ENVIRONMENTAL

ACCOUNTING AUDITING IN INDIAN PUBLIC & PRIVATE SECTOR

COMPANIES



Yes 0 0 0 0

No. 60 87 82 94


Total 69 100 0 0

Q.21 Does your company provide any specified budget allocation for the


No public sector company out of 69 is found in favour of the specified budget

allocation for the environmental accounting and reporting and 60 (87%) did

not favour it. 9 (13%) companies not responded about specified budget

allocation for the environmental accounting and reporting in the public sector

companies.

208

In case of private sector, all companies not favoured a specified budget

allocation for the environmental accounting and reporting. 82 (94%) have no

such budget while 5 private sector companies (6%) expressed no opinion

about the specified budget allocation for the environmental accounting and

reporting in the public sector companies.

Obviously, a large number of the public and private sector Indian

companies have not specified budget allocation for the environmental


Table 22 shows the capitalization of environmental costs in


companies.

TABLE -4. 22

CAPITALISATION OF ENVIRONMENTAL COST FOR


PUBLIC & PRIVATE SECTOR COMPANIES



a) Improving efficiency of existing assets. 20 30 30 34

b) Increasing capacity of existing assets.25 36 25 29

c) Improving safety of existing assets. 10 14 15 17

d) Reducing environmental contamination likely to occur as a result of future operations. 0 0 0 0

e) Preventing environmental pollution. 0 0 0 0

f) Conserving the environment. 0 0 0 0

209

g) If any other (please specify) 0 0 0

h) No Response 14 20 17 20

Total 69 100 87 100

Q.22 which of the following environmental cost should be capitalized?

(a) Improving efficiency of existing assets. [ ]

(b) Increasing capacity of existing assets. [ ]

(c) Improving safety of existing assets. [ ]

(d) Reducing environmental contamination likely to occur as a [ ]

result of future operations.

(e) Preventing environmental pollution. [ ]

(f) Conserving the environment. [ ]

(g) If any other (please specify)

…………………………………………………………………

……………………………………………………………………

20 public sector companies (29%) are in favour of the capitalization of

improving efficiency of existing assets for environmental accounting and

reporting, while 25 (36%) companies are in favour of the capitalization of

increasing capacity of existing assets and 10 (14%) companies are in favour of

the capitalization of improving safety of existing assets for the environmental

accounting and reporting. Whereas not even a single company is in favour of

the capitalization of the Reducing environmental contamination likely to

occur as a result of future operations, preventing environmental pollution and

cost of conserving the environment. While 2 Indian public sector companies

210

pointed out that pollution control equipment and machine should be

capitalized for the environmental accounting and reporting and 14 (20%)

companies did not respond.

Similarly, in case of private sector companies, 30 (43%) are in favour of

the capitalization of improving efficiency of existing assets for environmental

accounting and reporting. While 25 (29%) companies are in favour of the

capitalization of increasing capacity of existing assets and 15 (17%) companies

are in favour of the capitalization of improving safety of existing assets for the

environmental accounting and reporting. Whereas not a single Company is in

favour of the capitalization of the Reducing environmental contamination

likely to occur as a result of future operations, preventing environmental

pollution and cost of conserving the environment. 17 (20%) Indian private

sector companies not responded for capitalization of environmental cost in

the environmental accounting and reporting.

It is therefore obvious that a large no. of public sector Indian companies

as well as private sector companies are in favour of the capitalization of

improving efficiency of existing assets for environmental accounting and

reporting. There is no significant difference in the opinion of public and

private sector Indian companies about the capitalization of environmental

cost for corporate environmental accounting and reporting in Indian public

and private sector companies.

211

The table 23 depicts various environmental costing approaches according

to order of importance in public and private sector Indian companies.

TABLE -4. 23

VARIOUS ENVIRONMNTAL COSTING APPORACH ACCORDING TO

ORDER OF IMPORTANCE FOR ENVIRONMENTAL ACCOUNTING

AND REPORTING IN INDIAN PUBLIC &PRIVATE SECTOR

COMPANIES

Response (a) Current cost (b) Projected cost (C) Undiscounted (d) If any

other category involved in of performing projected (please specify)

performing environmental expenditure the required protection

activities activities discounted at risk free trade.

Private Public Private Public Private Public Private Public Sector Sector Sector Sector Sector Sector Sector Sector companies companies companies companies companies companies companies companies

Rank No. Percent No.Percent No.Percent No.Percent No. Percent No.Percent No.Percent No. Percent

Rank 1 20 29 31 36 25 36 13 15 21 30 0 0 0 0

Rank 2 30 43 37 43 17 25 27 31 19 28 27 31 0 0 0 0

Rank 3 07 10 11 12 13 19 35 40 21 30 31 36 0 0 0 0

Rank 4 09 14 06 07 11 16 07 08 04 06 03 03 0 0 0 0

No Response 3 04 2 02 3 04 5 06 04 06 26 30 0 0 0

Total 69 100 87 100 69 100 87 100 69 100 87 100 0 0 0 0

Q.23 Which approach do you prefer? Please specify order of importance?

(a) Current cost involved in performing the required activities [ ]

212

(b) Projected cost of performing environmental protection

activities discounted at risk free trade. [ ]

(c) Undiscounted projected expenditures [ ]

(d) If any other (please specify)

………………………………………………………………

…………………………………………………………………

There are three environmental costing approaches: first- Current cost

involved in performing the required activities, second projected cost of

performing environmental protection activities discounted at risk free trade

and third undiscounted projected expenditures. In the first case only 20 (29%)

public companies gave the first rank, 30 (44%) the second rank, 9 (13%)

companies gave the third rank and 7 (10%) companies gave the fourth while

13 (19%) companies did not give response about first approach. In case of

second approach only 25 (36%) companies gave the first rank, 17 (25%) the

second rank, 13 (19%) the third rank and 11 (16%) the fourth rank while rest

of them 13 (19%) companies did not respond. Regarding third approach, 13

(19%) companies gave the first rank, 19 (25%) companies gave the second

rank, 21 companies (30%) the third rank and 4 companies (6%) the fourth

while rest of them 12 companies (17%) not responded.

Whereas, 31 private sector companies (36%) gave the first rank, 37 (43%)

companies second rank, 11 (13%) third rank and 6 companies (7%) the fourth

rank while rest of them i.e. 12 (14%) companies did not give respond for first

approach. In case of second approach only 15 (17%) companies gave the first

213

rank, 27 companies (31%) second rank, 35 companies (40%) gave third rank

and 7 (8%) companies the fourth, while remaining 3 (3 %) companies did not

respond for second approach. Regarding third approach only 21 (24%)

companies gave the first rank, 27 companies (31%) the second rank, 31 (35%)

the third rank and 3 companies (3%) the fourth rank while remaining 5

companies (6 %) did not respond for this approach.

It is evident that there is no significant difference in the opinion of public

and private sector Indian companies about the various environmental costing

approaches according to order of importance.

Table 24 shows the significance of environmental auditing in public and

private sector Indian companies.

TABLE -4. 24

SIGNIFICANCE OF ENVIRONMENTAL ACCOUNTING & AUDITING

IN INDIAN PUBLIC & PRIVATE SECTOR COMPANIES


No Percent No Percent

(a) Improve credibility of information provided. 20 29 25 29

(b) Better dependability on environmental data and reports 25 36 30 34

(c) Better compliance with environmental law 05 07 07 08

d) Better compliance to regulatory norms. 05 07 07 08


Total 69 100 87 100

214

Q. 24 If your answer is yes, do you agree that environmental

auditing is necessary to,

(a) Improve credibility of information provided. [ ]

(b) Better dependability on environmental data and reports. [ ]

(c) Better compliance with environmental law [ ]

d) Better compliance to regulatory norms. [ ]

20 (29%) public sector companies considered environmental auditing

necessary to improve credibility of information provided. 25 (36%) companies

agreed that it is necessary for Better dependability on environmental data and

reports. While 5 companies (7%) were in favour of environmental audit which

is necessary for better compliance with environmental laws. 5 companies (7%)

were satisfied with better compliance to regulatory norms and 14 (20%)

companies not responded.

In case of private sector companies, 25 (29%) companies considered

environmental auditing significant for improving credibility of information

provided. Whereas 30 (34%) companies agreed that it is necessary for better

dependability on environmental data and reports. While 7 (8%) companies

argued that environmental audit is necessary for better compliance with

environmental law. Only 7 companies (8%) found essential for better

compliance to regulatory norms and 18 (21%) companies expressed no

opinion about the significance of environmental auditing.

215

No significant difference in the opinion is noted about the significance of

environmental auditing in public and private sector Indian companies.

TABLE – 4.25

PERSON RESPONSIBLE FOR THE TASK OF

ENVIRONMENTAL AUDIT

Response Internal External Chartered Engineers Qualified A team of category

auditors auditors accountants environmental -all these Other persons auditors

PUBLIC SECTOR

No.percen-No.percen-No.percen- No. percen- No. percen- No. percen- No. percentage tage tage tage tage tage tage

Yes 10 14 28 41 23 33 2 03 39 57 19 28 0 0

No 50 73 29 42 27 39 49 71 17 25 37 54 0 0

No Response 09 13 12 17 19 28 18 26 13 19 13 18 69 100

Total 69 100 69 100 69 100 69 100 69 100 69 100 69 100

PRIVATE SECTOR

Yes 27 31 36 41 35 41 1 01 49 56 27 31 0 0

No 39 45 27 31 29 33 73 84 21 24 43 49 78 90

No Response 21 24 24 28 23 26 13 15 17 20 17 20 09 10

Total 87 100 87 100 87 100 87 100 87 100 87 100 87 100

Q.25 Who in your opinion should be entrusted the task of

environmental audit?

(a) Internal auditor [ ]

(b) External auditor [ ]

(c) Chartered Accountant [ ]

(d) Cost accountant [ ]

216

(e) Engineers [ ]

(f) Qualified environmental auditors [ ]

(g) A team of above persons [ ]

(h) If any other (please specify)

………………………………………………………

……………………………………………………………

In public sector companies, 10 (14%) companies agreed with internal auditor

as person responsible for the task of environmental audit while 50 (73%) did

not agree with internal auditors and 9 (13%) not responded. In case of

external auditors 28 (41%) agreed with external auditors whereas 29 (42%)

companies did not agree and 12 (13%) not responded about the external

auditors as persons responsible for the task of environmental audit.

Regarding chartered accountant 23 (33%) companies agreed with Chartered

Accountant while 27 (26%) did not agree and 19 (28%) not responded. In the

case of engineer, 2 (3%) companies agreed with engineers and 49 (71%) did

not agree and 18 (26%) not responded for the engineers. About qualified

environmental auditors 39 (56%) companies agreed with qualified

environmental auditors and 13 (19%) not responded for the qualified

environmental auditors as an appropriate person for the task of

environmental audit. In case of a team of above said persons 19 (28%)

companies favoured such team while 37 (54%) companies opposed it and 18

(26%) not responded.

217

Similarly, in private sector companies 27 (31%) companies regarded

internal auditor as an appropriate person for the task of environmental audit

while 39 (approx 45%) are not satisfied with internal auditors and 21 (24%)

not responded for the task of environmental audit. In case of external

auditors 36 (41%) companies agreed with external auditors whereas 27 (31%)

companies did not agreed and 24 (28%) did not respond. About chartered

accountants 35 (40%) companies favoured Chartered Accountant while 29

(33%) disagreed and 23 (26%) not responded. Regarding engineer 1 (1%)

companies agreed and 73 (82%) companies opposed them and 13 (15%) not

responded. In case for qualified environmental auditors, 49 (56%) companies

found qualified environmental auditors good enough to environmental

accounting and reporting , whereas 21 (24%) companies did not agree and 17

(20%) companies not responded .About a team of above persons for the task

of environmental audit, 27 (31%) companies favoured such a team whereas

43 (49%) companies disagreed and 17, (20%) companies did not respond for

the above team.


sector Indian companies are in famous of qualified environmental auditors for

the task of environmental audit .There is no significant difference of opinion

of public and private sector Indian companies about the external auditors for

the task of environmental audit.

218

TABLE – 4.26

CREATION OF SEPARATE ENVIRONMENTAL AUDIT DEPARTMENT

FOR ENVIRONMENTAL ACCOUNTING IN INDIAN PUBLIC &

PRIVATE SECTOR COMPANIES



Yes 0 0 0 0

No 62 90 75 86


Total 69 100 87 100

Q.26 Does your company have a separate environmental audit department?

[ ]

Out of 69, not even a single public sector company founded of the

separate environmental audit department for environmental accounting and

reporting. While 62 (90%) companies opposed it and 17 (25%) companies gave

no response.

On the other hand, in case of private sector companies, out of 87 no

company is favour of separate environmental audit department for

environmental accounting and reporting. While 75 (86%) companies did not

favour it and 12 (14%) private companies expressed no opinion about a

separate environmental audit department for environmental accounting and

reporting.

219

Thus a large number of the public and private sector Indian companies

are not in favour of having the separate audit department for environmental


TABLE -4.27

LEGISLATION TO FACILITATE CORPORATE ACTIVITY IN

ENVIRONMENTAL ACCOUNTING AUDITING IN INDIAN PUBLIC &




Yes 35 51 30 34

No 25 36 40 46


Total 69 100 87 100

Q.27 Should Government bring in more legislation to facilitate

corporate activity in environmental accounting and reporting? [ ]

35 (51%) public companies argued that government should bring in more

legislation to facilitate corporate activity in environmental accounting and

reporting. While 25 (36%) public companies opposed it and 9 (13%) public

companies did not respond.

30 (34%) private companies agreed that government should bring in

more legislation to facilitate corporate activity in environmental accounting

and reporting. Whereas 40 (46%) private companies disagreed with it and 17

(20%) companies did not disclose their opinion about government bringing in

220

more legislation to facilitate corporate activity in environmental accounting

and reporting.

A large number of the public and private sector Indian companies argued

that government should bring in more legislation to facilitate corporate

activity in environmental accounting and reporting noted as no significant

difference of opinion between public and private sector companies is noted

about government’s bringing in more legislation to facilitate smoother

corporate activity in environmental accounting and reporting.

TABLE – 4.28

NEED OF ACCOUNTING STANDARD ON ENVIRONMENTAL

ACCOUNTING AND REPORTING

Response category Public Sector companies Private Sector companies


Yes 50 72 60 69

No 05 08 10 11


Total 69 100 87 100

Q.28 If yes, is there a need to introduce Accounting Standard on


50 (72%) public companies showed a need of accounting standards on

environmental accounting and reporting and 05 (7%) public companies did

not favour it whereas 14 (20%) companies not responded.

221

In case of private sector companies 60 (69%) companies favoured the

need of accounting standards in environmental accounting and reporting.

While only 10 (11%) companies discarded it and 17 (17%) private companies

gave no response.

From the above data it becomes obvious that a large number of the public

and private sector Indian companies are in favor of accounting standard on

environmental accounting and reporting. There is no significant difference in

the opinion of public and private sector companies for the need of accounting

standards in environmental accounting and reporting.

TABLE –4. 29 ACTIVITIES IN ENVIRONMENTAL ACCOUNTING AND REPORTING


Level of activities in terms Prevention or repair of environmental damages of prevention or repair of such as reusing disposable material, waste environmental damage management


High 0 0 0 0

Low 59 85 65 75

Same 0 0 0 0


Total 69 100 87 100

2. Aesthetic improvement such as tree plantation


High 02 03 05 06

Low 50 72 70 80

Same 0 0 0 0


Total 69 100 87 100

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3. Pollution control measures such as for keeping water, air, noise and colid waste pollution under control.


High 55 80 60 69

Low 05 07 03 03

Same 0 0 0 0


Total 69 100 87 100

4. Conservation of natural resources like land, energy and water.


High 03 04 4 05

Low 52 75 63 72

Same 0 0 0 0


Total 69 100 87 100

Q. 29 Here you will find a list of activities in environmental accounting and

reporting in the four areas i.e. prevention or repair of environmental

damage, aesthetic improvement, pollution control measures and

conservation of natural resources, would you kindly indicate the level of

activity engaged in by your company. Please give the level of activities

in terms of investment in Environmental related activities by your

company in these activities in relation to your total investment since

liberalization?

Kind of Activity Level of Activity in terms of investment

1. Prevention or repair of environmental damages. Such as

reusing disposable material, waste management

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High [ ] Low [ ] Same [ ]

2. Aesthetic improvement such as tree plantation


3. Pollution control measures such as for keeping water, air, noise and colid

waste pollution under control.


4. Conservation of natural resources like land, energy and water.


There are four activities in public and private companies relating to

environmental protection and preservation , that is 1. Prevention or repair of

environmental damages, such as reusing disposable material, waste

management 2. Aesthetic improvement such as tree plantation 3. Pollution

control measures such as for keeping water, air, noise and solid waste

pollution under control; and 4. Conservation of natural resources like land,

energy and water to be separated troughs environmental accounting and

reporting. There are four types of opinion responds by companies categorized

as high, low and same and no response. In case of public companies

regarding performing first activities, no company out of 69 (86%) companies

are in favour of low category and no any company responded for the same

category and 10 (14%) not responded. In the case of second activity, 2 (3%)

companies undertake high level activities. 50 (72%) companies agreed with

the low category and no one company is satisfied with the same category and

17 (25%) not responded for any category. In case of third activity, 55 (80%)

224

companies are in favour of high level category and 5 (7%) companies with the

low category and no company favoured the same category and 09 companies

(13%) not responded about any category. In case of fourth category, 3 (4%)

responded for the first category and 52 (75%) companies favoured the same

category and 14 (20%) not responded about any category.

In case of private companies regarding first activities, no companies from

the sample is satisfied with high level category and 65 (75%) companies are in

favour of low level category and no company responded for the same level

category and 10 (14%)companies not responded for any categories. In the

case of second activity 5 (6%) companies are agreed with high level category.

70 (80%) companies are satisfied with the low category and no company is

favoured the same category and 12 (14%) not responded for any category.

Regarding the third activity 60 (69%) companies are in favour of high level

category and 3 companies (3%) desired the low level category and no

company satisfied with the same level category and 24 (28%) not responded

about any category. In case of fourth activities, 4 (5%) responded for the high

level category and 63 (72%) companies favoured the same level category and

no any company is in favour same level category and 20 (20%) not responded

at all.

Table 30 presents opinion about the interested group of environmental

information related to environmental accounting and reporting in Indian

public and private sector companies.

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TABLE -4.30

INTERESTED GROUPS FOR ENVIRONMENTAL INFORMATION

REATED TO ENVIRONMENTAL REPORTING IN INDIAN PUBLIC &




(a) Management of the company 10 14 15 17

(b) Owners of the company 09 13 10 12

(c) Employees 0 0 0 0

(d) Competitors 0 0 0 0

(e) Insurers 0 0 0 0

(f) Government 15 22 15 17

(g) NGO/Social activist 16 23 20 23

(h) Lenders 0 0 0 0

(i) Financial advisors and analyst 0 0 0 0

(j) Journalist/or media 0 0 0 0

(k) Suppliers 0 0 0 0

(l) Customers 0 0 0 0

(m) Environmental organizations 12 18 15 17

(n) Society at large 06 09 07 08

(o) If any other (please specify) 0 0 0 0

(p) No Response 01 01 05 06

Total 69 100 87 100

Q.30 In your opinion who is the interest groups of environmental information

related to environmental reporting?

(a Management of the company [ ]

(b) Owners of the company [ ]

226

(c) Employees [ ]

(d) Competitors [ ]

(e) Insurers [ ]

(f) Government [ ]

(g) NGO/Social activist [ ]

(h) Lenders [ ]

(i) Financial advisors and analyst [ ]

(j) Journalist/or media [ ]

(k) Suppliers [ ]

(l) Customers [ ]

(m) Environmental organizations [ ]

(n) Society at large [ ]

(o) If any other (please specify)

…………………………………………………………

…………………………………………………………

10 (14%) public sector companies are in favour of Management of the

companies as a interested party in environmental accounting and reporting

while 9 (14%) agreed with owners of the companies and none of them argued

for employees, competitors and insurers. 15 (22%) companies found

government as one of the interested party in environmental accounting and

reporting and 16 (23%) regarded NGOs/social activist as the interested

parties in environmental accounting and reporting. No company is in favour

of lenders, journalist/media, suppliers, customers. While 12 (17%) public

227

companies found environmental organization more interested in

environmental accounting and reporting and 06 (9%) companies are in favour

of society. Only 1 (1%) company not responded for the interested group of

environmental information related to environmental accounting and

reporting.

Whereas 15 (17%) private sector companies regarded management of the

companies as one of the most important parties interested in environmental

accounting and reporting while 10 (11%) considered owner of the companies

to be more interested in environmental accounting and reporting and none of

them favoured employees, competitors and insurers as a interested group of

environmental information related to environmental accounting and

reporting. In case of government, 15 (17%) found it be most interested in it,

while 20 (23%) companies are in favour of NGOs/social activist. No company

showed any relevance lenders, journalist /media, suppliers, customers with

such information. While 15 (17%) companies related of environmental

organizations with information on environmental accounting and reporting

and 07 (8%) companies found society concerned with such information and 05

(6%) not responded .

It is therefore concluded that a large number of public and private

companies found NGOs/social activist as interested groups of environmental

information related to found environmental accounting and reporting. There

is no significant difference in opinion of public and private sector companies

228

about the interested group of environmental information related to


Table 31 depicts the adoption for the norms of ISO 14001 for disclosure of


companies.

TABLE -4.31

ADOPTION FOR ISO 14001 FOR DISCLOSURE OF ENVIRONMENTAL


SECTOR COMPANIES



Y es 0 0 0 0

No 60 87 80 92


Total 69 100 87 100

Q. 31. Do you adopt norms as for ISO 14001 for disclosure of


Out of 69 public companies, not even a single company favoured

adoption for the norms of ISO 14001 for disclosure of environmental

accounting and reporting. While 60 (87%) companies disagreed with it and 9

(13%) companies gave no response about the adoption for the norms of ISO

14001 for disclosure of environmental accounting and reporting in public

sector companies.

229

In case of private sector companies, out of 87 no company found a need

for the adoption for the norms of ISO 14001 for disclosure of environmental

accounting and reporting. While 80 (92%) companies disagreed with it and 7

(8%) private companies not responded for the adoption for the norms of ISO

14001 for disclosure of environmental accounting and reporting in the private

sector companies.

It is therefore obvious that a good number of the public and private

sector Indian companies did not favour adoption for the norms of ISO 14001

for disclosure of environmental accounting and reporting in the public sector

companies. There is no significant difference in the opinion of public and

private sector companies about the adoption for the norms of ISO 14001 for

disclosure of environmental accounting and reporting.

Documents

V{tÑàxÜ @Gshodhganga.inflibnet.ac.in/bitstream/10603/11267/12... · null hypothesis that is, As far as environmental protection and management challenges are concerned, there is