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International Journal of Academic Research in Accounting, Finance and Management Sciences

Open Access Journal

ISSN: 2225-8329

Environmental Cost - An Environment Management Accounting Component

Ileana – Sorina Rakos, Andreea Antohe

http://dx.doi.org/10.6007/IJARAFMS/v4-i4/1302

Open access

The present article intends to highlight the importance of the impact of the economic activities on the environment, and of its integration in the decisional and financial system of the national economic entities. During the last decade, a new challenge has appeared for the professional accountant, namely that of the environmental accounting, meant to maximize life quality. Environmental accounting is a global concept, and, from the perspective of the impact of the economic activity on the environment, the authors consider the environmental cost as the essential instrument providing the information volume and quality necessary to the managers on different hierarchic levels of an economic entity for the assessment, identification, analysis and recording of the impact produced by the economic activity on the environment, and the use of such information in the financial and decisional process of the economic entity. Within this context, we intend to show the effect of the activities carried out by the Romanian economic entities on the environment, by means of the environmental cost. Having as a starting point the stage of the researches carried out in the literature regarding the environmental cost, made by different experts, we intend to prove the opportunity of knowing the current, future and potential environmental costs which, actually, represent the starting point, both in the achievement of the objectives of reducing the environmental expenses, and in the intensification of the processes of recovery and improvement of the financial and environmental performances. Thus, the environmental cost may be considered as the essential instrument in the identification, recording, analysis and assessment of the impact produced by the economic activities on the environment. At the same time, the environmental cost is what warns the manager on the mode of generation of profit or loss from the activity carried out by the economic entity - resulted both from the current activity, and from that of the financial exercise. Also, the environmental cost is the instrument providing us with a clear and real picture on the mode in which the environmental factors influence the activity of the economic entity.

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In-Text Citation: (Rakos & Antohe, 2014)
To Cite this Article: Rakos, I. – S., & Antohe, A. (2014). Environmental Cost - An Environment Management Accounting Component. International Journal of Academic Research in Accounting Finance and Management Sciences, 4(4), 224–237.