Role Of Accounting In Biodiversity

1041 Words 5 Pages
The role of accounting is not only limited to making decisions to achieve its aimed objectives, however it significantly plays a crucial part in managing the environmental system. One of the greatest threats to the planet is the erosion of the world’s biodiversity that has resulted to mass extinction of species, which is mostly found to be man-made. Biodiversity is an important resource and is essential to the well-being of the planet and, in particular, for the human beings. It plays a central role in economic development through its provision of ecosystem services. Extinction is a striking problem facing the world’s biodiversity with the rate of species, diminishing possibly exceeding the rate of new species discovered and potential impending …show more content…
Having said that, biodiversity should be accounted for and reported on by organizations, but it is difficult to decide how it is to be done. (Maunders and Burritt, 1991) identified that applying accounting techniques to ecological issues has been notably difficult. However, (Gray et al., 1993, p 6) described environmental accounting as a part of the environmental management system (EMS) that covers all the areas of accounting which may be affected by the business response to environmental issues. Accounting and accountant could play an outstanding role in the successful implementation of the EMS, by applying functions of accounting such as measuring, recording, monitoring and verifying financial data which enhances the quality of better decision making. Although, it may cost for monitoring, waste management, pollution control, research and development, insurance, habitat protection and so on, it would be more advantageous to live in a healthy …show more content…
The research examines actual real life occurrences and has sought to understand the circumstances and then have predicted the accounting treatment for the depicted circumstances or challenges. Also, it looks for understanding and considering the economic consequences of those accounting decisions i.e. identifying the greatest threats, adopting specific methods, predicting its possible outcomes and determining the actual results obtained by making effective accounting decisions. The stakeholder theory, a theory of organizational management and business ethics addressing the morals and values, is applied in the research paper on the role of accounting under stakeholder value based management. This research is also connected to legitimacy theory as the organizations continually seek to ensure that, they operate within the social bounds and norms of their respective societies and ensure that their activities are perceived by users-outsiders or internal users as being “legitimate”. Moreover, while determining financial accounting and managerial accounting and in the decision making process, it follows a prescription or steps to tackle their out-comings, so prescriptive theory has also been adopted in this

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