An analysis on the trends in the adoption and implementation of environmental accounting practices and reporting manufacturing industry. A Case of Central African Cables (CAFCA) Ltd.

ABSTRACT

The study analysed the trends in the adoption and implementation of environmental accounting and reporting at CAFA Ltd in Zimbabwe. Emphasis was placed on environmental accounting practises which include elaboration of environmental budgets and calculation of environmental costs. Reporting on environmental costs, liabilities revenues and contingencies was also analysed. Major factors influencing the adoption and implementation of environmental accounting and reporting pertaining to the organisation was to be determined from a pool of factors established by prior studies which include size, industry type ,board composition ,internal organisational interests and pressure from stakeholders. The research aimed at providing a contribution to existing literature in addressing the debate on how organisations are incorporating environmental accounting and reporting given the current situation. The current situation is that environmental law has gained prominence yet there is no mandatory GAAP standard pertaining the accounting and reporting of environmental financial information. Companies engaging into environmental accounting and reporting are doing so voluntarily. In past researches ,environmental costs and liabilities ,revenue and assets have been referred to as environmental related issues without specific terms .Literature have criticised the accounting profession for being reluctant ,uncommitted and slow in adopting and implementing environmental accounting and reporting despite efforts by the big four accounting firms (Pwc,Ernest and Young ,Delloite and KPMG) of carrying out surveys on the environmental accounting and reporting as an emerging issue in the accounting system. The researcher used both primary and secondary sources to collect data so as to establish trends in the adoption and implementation of environmental accounting and reporting. The study employed techniques such as interviews and questionnaires to accounts department, SHE dept, senior executives and other employees so as to achieve the objectives and coming up with informed conclusions. Statistical methods were used to for diagnostic tests for significance of data so as to ensure validity and regression models were employed to analyse the relationship between level of adoption and factors influencing adoption and implementation. Findings indicated that the level of adoption and implementation is still an ongoing process in its early stages as only four of the eight accounting practises which the researcher had posed as standard accounting practises were adopted by CAFCA Ltd. Reporting on financial environmental information is low and shows evidence of inconsistency and in sufficiency. Absence of a costing system to complement the traditional despite that these costs are recognised calculated and budgeted for independently of other costs for instance administrative, general and distribution costs. The accounting staff is involved in eco –budgets and the calculation of costs and investment appraisals associated with the environment however from the impression obtained from findings classification of these costs as environmental borne lies with the SHE department. Having identified the research findings for the area under investigation the researcher came up with a number of recommendations which include adopting and implementing more environmental accounting practises and adopt reporting strategies such as the popular Global Reporting Initiative .Research and development committee to enhance the existing practises .The researcher also suggested area for further research as ,identification of factors hindering the adoption and implementation of environmental accounting and reporting and also measures that can be implemented to encourage high adoption and implementation grades.