THE EMERGENCE OF ENVIRONMENTAL ACCOUNTING

 

 

 

 

By Salwana Selamat and Nazirah Naiimi, Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Perlis

Environmental accounting is a crucial field that has gained increasing prominence in recent years as societies and businesses recognize the pressing need for sustainable and responsible practices. The worldwide awareness of environmental concerns has significantly increased over the last twenty years which the obvious concerns such as climate change, the exhaustion of restricted resources, and the destruction of natural habitats.  Inadequate environmental practices can significantly bring harm to both the business and its financial interests as well as the society. This article will explore on the definition, goals and challenges that associated with environmental accounting.

Yakhou and Dorweiler, (2004), defined environmental accounting as an inclusive field of accounting which provides reports for both internal uses, generating environmental information to help make management decisions on pricing, controlling overhead and capital budgeting, and external use, disclosing environmental information of interest to the public and to the financial community. It involves the systematic collection, measurement, and integration of data related to resource consumption, emissions, waste generation, and other environmental aspects into an organization's financial and managerial accounting systems. Environmental accounting is a specialized branch of accounting that focuses on quantifying, analyzing, and reporting the environmental impact and costs associated with an organization's activities, products, and services. This is in line with Stanko et al., (2006) portrayed environmental accounting as the identification, measurement, and allocation of environmental costs, the integration of these environmental costs into business decisions, and the subsequent communication of the information to a company's stakeholders.

As the environmental accounting becomes more prominent therefore the primary goal of environmental accounting encompasses the following in accordance with Association of Chartered Certified Accountants (ACCA)  (2016):

Measurement and Reporting: It refers to the processes and practices of quantifying, documenting, and communicating financial and non-financial information related to an organization's environmental activities and impacts. This would help investors to understand the extent of environmental impacts.

Compliance: Environmental accounting compliance refers to the practice of complying with accounting standards and principles that specifically relate to environmental issues. This includes the accurate recording and reporting of financial information related to environmental activities and obligations in accordance with relevant laws, regulations, and accounting policies. Environmental accounting compliance helps organizations track, measure, and disclose their environmental performance and financial impacts, ensuring transparency and accountability in their environmental reporting.

Cost Management: Identify and manage environmental costs that enable organizations to reduce expenditure associated with resource use, waste management, and pollution control.

Resource Efficiency: Promote resource efficiency by analyzing data and identifying opportunities to reduce resource use and improve processes. Enhancing the resource efficiency of an organization is a key factor in boosting its competitiveness. Improving resource efficiency within a company therefore has significant potential to reduce production costs, increase productivity and simultaneously playing a substantial role in addressing environmental issues.

Risk Assessment and Management: Assess and manage environmental risks, including potential liabilities and reputational risks associated with poor environmental performance.

Decision Support: Provide relevant information for decision-making within the organization to encourage investment in sustainability and environmentally conscious practices.

Sustainability: Support sustainability efforts by tracking progress towards environmental goals and identifying areas for improvement. The idea of sustainable development, which emphasizes the preservation of natural resources and the recognition of their value in financial reporting, has increased the responsibility of stakeholders in the field of environmental accounting. In the early stages of economic development, natural resources were not given adequate priority.

Benchmarking: Compare an organization's environmental performance with industry benchmarks and best practices to promote competitiveness and innovation.

Stakeholder Engagement: Engage with stakeholders interested in the organization's impact on the environment, promoting trust and demonstrating commitment to responsible business practices.

 

These goals collectively aim to integrate environmental considerations into an organization's decision-making processes, financial reporting, and overall business strategy, fostering sustainability and responsible environmental stewardship.

Challenges and barriers in the field of environmental accounting as outlined by Hossain (2019) include:

Data Quality and Availability: The difficulty of obtaining accurate and reliable environmental data, particularly for non-financial aspects, can hinder effective environmental accounting.

Complexity and Standardization: The complexity of environmental issues and the absence of standardized accounting methods can make the development of consistent and comparable environmental challenging. The accounting profession has some recognized accounting standard for the conduct of accounting practice, but there is no recognized international accounting standard for environmental accounting.

Costs and Resource Constraints: Establishing and maintaining environmental accounting systems can be costly, especially for smaller organizations with limited resources. Implementing environmental accounting and reporting will require additional human resources and financial investments. Many businesses, unless mandated by regulations, might be reluctant to bear these additional expenses. Therefore, the prospect of incurring extra costs can be viewed as a challenge in the adoption of environmental accounting.

Data Integration: Integrating environmental data with financial accounting systems can be technically challenging and may require significant information technology infrastructure. Accounting functions as an information system, yet its effectiveness is compromised when there is insufficient data, leading to challenges in the accurate recording and presenting financial data, as accountants may struggle to make proper entries due to the lack of necessary information.

Regulatory Compliance: Complying with ever-evolving environmental regulations and ensuring compliance in reporting can be a major burden for organizations. Every organization establishes rules and regulations to ensure smooth operations and overcome various challenges. A well-defined set of rules and regulations is essential for the effective implementation of environmental accounting.

Lack of Expertise: A shortage of professionals with expertise in environmental accounting can hinder its adoption and implementation. Highly educated and skilled personnel are essential for the successful and efficient implementation of environmental accounting.

Resistance to Change: Organizations may encounter resistance to change from internal stakeholders who are used to traditional accounting practices. Various challenges may arise during the introduction and implementation of environmental accounting. It is crucial to proactively identify these challenges in advance to either minimize or overcome them. This proactive approach is essential to ensure proper implementation and achieve greater efficiency of environmental accounting practices.

Complexity of Environmental Impact Assessment: Assessing the overall environmental impact of an organization's activities, products, or services can be complicated and involve various interconnected factors.

The absence of numerical measures for environmental issues: Only a small number of manufacturing organizations provide numerical information, and this has a detrimental impact on the practice of environmental accounting.

Short-Term Focus: Businesses may prioritize short-term financial gains over long-term environmental sustainability, creating a barrier to the adoption of environmental accounting.

Public Perception: Negative public perception or skepticism about the authenticity of environmental accounting efforts can be a barrier to its adoption.

Integration with Strategy: Aligning environmental accounting with an organization's strategic objectives can be challenging, particularly when environmental considerations are not integrated into core business strategies.

Addressing these challenges and barriers are essential for the successful implementation of environmental accounting and its integration into an organization's sustainability efforts and decision-making processes. In summary, environmental accounting plays a key role in the modern era, addressing the pressing requirement for organizations to quantify their environmental effects and sustainable initiatives. This approach not only ensures adherence to severe regulations but also offers a structure for businesses to proactively participate in conserving the environment, practicing responsible resource stewardship and well-being of what is being managed.

 

 

REFERENCES

ACCA. (2016, June 27). Environmental Management Accounting. ACCA Global. https://www.accaglobal.com/an/en/student/exam-support-resources/professional-exams-study resources/p5/technical-articles/environmental-management.html

Hossain, M. M. (2019). Environmental accounting challenges of selected manufacturing enterprises in Bangladesh. Open Journal of Business and Management, 7(02).

Stanko, B.B., Brogan, E., Alexander, E., & Chay, C. (2006). Environmental Accounting. Business & Economic Review, 52(3).

Yakhou, M., & Dorweiler, V. P. (2004). Environmental accounting: An essential component of business strategy. Business Strategy and the Environment, 13(2).

HELPING HANDS: THE BEAUTY OF PEER TEACHING

 

 

 

 

By Azura Mohd Noor and Fazni Mohamad Fadzillah, Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Perlis.

 

Abu Hurairah (RA) narrated that the Messenger of Allah (SAW) said:

“Whoever relieves a Muslim of a burden from the burdens of the world, Allah will relieve him of a burden from the burdens on the Day of Judgement. And whoever helps ease a difficulty in the world, Allah will grant him ease from a difficulty in the world and in the Hereafter. And whoever covers (the faults of) a Muslim, Allah will cover (his faults) for him in the world and the Hereafter. And Allah is engaged in helping the worshipper as long as the worshipper is engaged in helping his brother.”

Jami` at-Tirmidhi 1930, Book 27, Hadith 36

Helping a person in need for his own sake or to remove his troubles and worries is a deed which has been promised much reward by the Prophet. Moreover, giving a helping hand without asking for return also reflects what the ideal and harmonious society should look like. This society in which its members help, support, and encourage one another to become better and avoid helping others in acts that would displease Allah.

Learning is an integral part of students’ life in higher education institutions. Their main objective is to excel in their studies and use the knowledge learnt while working and help promote a better life in society. Higher education is a rich cultural and scientific asset which supports personal development and promotes economic, technological, and social shifts. The exchange of knowledge, research and innovation are promoted, and students are equipped with the skills needed to meet fast changing labor markets (UNESCO, 2023).

How can the concept of helping hands for betterment be applied in this learning environment?

An increased interest in involving students as partners in learning and teaching has emerged, in order to meet the dual requirement of improving teaching and learning quality while doing more with less (Stigmar, 2016). Several strategies have been introduced and adopted in the learning and teaching process to encourage students to strive for excellence in their study and their life, such as peer teaching and peer learning.

This article will explore one main strategy known as ‘Peer teaching’ which is useful in applying the concept of helping ‘students with students’ and highlight the great beauty or advantages to them in terms of academic performance and non-academic performance.

Peer teaching is described as ‘people from similar social groupings who are not professional teachers helping each other to learn and learning themselves by teaching (Arisoy, 2021; Rahman et al., 2022). Peer teaching is one of the greatest ways to master a certain subject. It is a method of teaching, by which a student (known as student-teacher) instructs another student (student-learner), wherein the former will be an expert and the latter a novice. An expert student who is usually a senior or advanced student who takes on a limited instructional role is not expected to teach and present new material as they are not teachers, but they help to facilitate the learning of their peers. (Stigmar, 2016; Rahman et al., 2022).

Peer-teaching permits students to impart knowledge and skills to their classmates. Therefore, they must understand the material at a deeper level to be effective teachers (Tsai et al., 2021; Rahman et al., 2022). Let’s explore the advantages gained by the ‘student-teacher’ when learners shift from being students as recipients to being productive teachers.

 

The Advantages of Peer Teaching

1.         Improve communication and presentation skills. 

According to Rahman et al. (2022) acquiring vital communication skills such as confidence in teaching, explaining complex concepts, and better understanding of the topic emerged as primary benefits that the ‘student-teachers’ obtained from the peer teaching programs. In the context of providing and presenting information accurately and efficiently, all the ‘student-teachers’ need to develop strategies that would make a complex and niche topic understandable to their novice audiences. Meanwhile a study done by Tsai et al. (2021) found that ‘student-learners’ expressed that their individualized sessions with the ‘student-teachers’ were beneficial in developing their presentation skills and confidence levels.

 

2.         Value-added experience for future development.

Peer teaching promotes a culture of intrinsic motivation and perhaps assists to develop a skill set essential for lifelong learning (Tsai et al., 2021). In addition, according to Rahman et al. (2022), the ‘student – teachers’ found that they are gaining advantages to their futures by getting valuable life experience where able improve their own depth of knowledge in the topic by educating others, upgrading their resume with their teaching experience which help their career path later, and obtaining recognition letters or certificates expressing gratitude for their service as value-added features of participating in peer teaching programs.

 

3.         Expertise shared efficiently to larger audience.

Peer teaching programs provide the opportunity to efficiently share their expertise in delivering their knowledge to a larger group of people instead of spending valuable time in unsustainable one-on-one interactions (Rahman et al., 2022). Thus the ‘student-teachers’ are able to gain experience in conducting larger groups interactions and present their lessons and ideas well to their peers.

 

4.         Increase flexibility in teaching methods.

A study by Rahman et al. (2022) found that an advantage of peer teaching emerges in increased flexibility in teaching methods where the ‘student-teachers’ indicated that they learned how to tactfully move individual issues to the end of the session to get the group through the planned content. The importance of having backup plans ready if technical issues occur also are discovered. This ability for teaching flexibility shows the potential of conducting peer teaching to be a key tool of professional development for the peer teachers.

 

5.         Lead to better student engagement.

Peer teaching involves direct interaction between the ‘student-learner’ and the ‘student-teacher’ in contrast to traditional classes that consist mostly of lectures from teacher to student. Therefore, it shows that peer teaching can lead to better student engagement (Stigmar, 2016). When both students and teachers feel at ease in their interactions, this permits student-learner to focus better on the lesson’s tasks and leads to higher accomplishments in the future. Moreover, student-learners are able boost their knowledge limit and thus allow a greater level of understanding while enabling them to improve their critical thinking.

 

Conclusion

Peer teaching is a learning-teaching strategy that provides benefits especially to students, ‘student-teachers’ and the education institutions in the long-term. Besides the benefits of sharing knowledge with peers, students that participate as teachers in the peer teaching program also gain many advantages such as improving communication and presentation skills, providing value-added experience for future professional development, sharing expertise efficiently to larger audience, increasing flexibility in teaching methods, and leading to better student engagement (Rahman et al., 2022, Tsai et al., 2021, Stigmar, 2016). Moreover, they can develop their empathy, motivation, communication, group-work, and time-management skills. On the other hands the teacher’s burden of responsibility is eased by sharing her duties while educating students to become independent.  Thus, the teacher’s role in monitoring and administering the students to ensure the peer teaching program’s success will increase.

 

REFERENCES

 

Arisoy, H. (2021). Striking the balance in peer-to-peer teaching. The Clinical Teacher, 18(6), 685-686.

Rahman, N. T., Meyer, C., Thakral, D., Cai, W. L., Chen, A. T., Obaid, R., & Garcia-Milian, R. (2022). Peer teaching as bioinformatics training strategy: incentives, challenges, and benefits. Medical Reference Services Quarterly, 41(1), 13-25.

Stigmar, M. (2016). Peer-to-peer teaching in higher education: A critical literature review, mentoring & tutoring. Partnership in Learning, 24(2), 124-136. https://doi.org/10.1080/13611267.2016.1178963

Tsai, T., Vo, K., Ostrogorsky, T. L., McGregor, J. C., McCracken, C. M., & Singh, H. (2021). A peer-teaching model to reinforce pharmacy students’ clinical knowledge of commonly prescribed medications. American Journal of Pharmaceutical Education, 85(5), 355-362.

UNESCO (April 20, 2023). What you need to know about higher education. Retrieved from https://www.unesco.org/en/higher-education/need-know#