Contemporary Issues in Accounting Essay Example | Topics and Well Written Essays - 750 words

Contemporary Issues in Accounting - Essay Example Around the world, governments (typically following the lead of practice) have begun to take notice, putting new disclosure regulations on the book. Despite these new regulations, significant questions remain about whether, and, possibly more importantly, how corporate disclosures about their social, environmental, and economic practices should evolve." (Corporate Disclosure of Social and Environmental Data Mandatory Vs Voluntary. 2004). If a particular organization is operating with an appropriate emphasis on its environmental issues, it means that it is focused on sustainability as well as the well being of the particular society in which the organization exists. Nowadays, the accounting system requires the disclosure of environmental facts in respect of financial accounting reports. The main purpose of preparing the financial accounting report is that to provide useful information about the business to its ultimate users. Such categories of users shall be owners, shareholders, investors, employees, suppliers, creditors and the public as a whole. Moreover, the report so made should be more relevant, it should possess the quality of materiality, accuracy and comparability. Environmental performance and economics measurements relate to a certain extent, as far as the accounting policies and reporting procedures are taken in to consideration. "Environmentally driven innovation can create shareholder value by lowering cost, improving production processes and service delivery, and helping to find new markets. Increased process efficiency is an example of a proven sustainability strategy for decreasing cost and adding revenue, there by improving profitability." (Slater and Gilbert 2004). The users of accounting reports should have a thorough knowledge about the changes that take place within the organization as well as in matter of accounting standard context. The accounting report should disclose the environmental performances, for the purpose of easily identifying and evaluating whether the organization is running as per the requirements of the society. Moreover, this helps to develop the reputation of the organization by comparing various environmental data obtained from the annual accounts of the company. "Investors and users of financial statements need information about the impact of environmental risks and liabilities on the financial position of the company, as well as the company's attitude towards the environment and its environmental performance, to the extent that these factors may have consequences for the financial health and performance of the company. Regulatory authorities have an interest in monitoring the application of environmental regulations by companies and the costs incurred as a result. But companies' voluntary disclosure of environmental data in annual accounts and annual reports is low. Users of annual reports have an interest in ascertaining to what extent environmental protection is an integral part of the company's policies and activities and what costs and benefits are associated." (Accounting: Commission issues Recommendation on environmental issues in companies' annual accounts a