Petcharat, Nickie and Mula, Joseph M. (2010) Can organizations meet their environment and social reporting obligations even in a financial crisis? Towards an effective sustainability management accounting system. In: Global Business Conference 2010, 13-16 Oct 2010, Dubrovnik, Croatia.
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To achieve sustainable development, organizations need to disclose three areas of performance - economic, social, and environment - to support stakeholders' interests as well as improving internal management decisions. This results in environmental and social cost information that needs to be incorporated in disclosures in the form of a triple bottom line. However, as these costs have been treated as overhead by traditional accounting such activity based costing (ABC) approach, this results in cost information inaccuracies when preparing environmental and social performance disclosures. To overcome some of these deficiencies in current systems, this study develops a conceptual model for a Sustainability Management Accounting System (SMAS) to improve the identification and measurement of environmental and social impact costs. A SMAS also provides companies with a way to improve cost allocation and analysis efficiency thus creating more accurate cost accounting data and meeting their reporting obligations even in hard times. The paper describes preliminary analysis undertaken to date. It would appear that most firms are focusing on reporting externally their social performance more than environmental indicators.
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