Towards a conceptual design for environmental and social cost identification and measurement system

Petcharat, Neungruthai Nickie and Mula, Joseph M. (2012) Towards a conceptual design for environmental and social cost identification and measurement system. Journal of Financial Reporting and Accounting, 10 (1). pp. 34-54. ISSN 1985-2517


Purpose – The purpose of this paper is to identify an effective management accounting system using sustainability accounting concepts for environmental and social cost measurement to add shareholder value. Suggestions from literature show that there is a need for a conceptual framework for environmental management accounting (EMA) and social management accounting (SMA) practices to be developed. This study therefore designs a conceptual model for a sustainability management accounting system (SMAS) combining EMA and SMA practices to create more accurate cost
information of environment and social impacts. A SMAS also expands on activity based costing (ABC) application to help in the cost analysis and allocation of environment and social impacts. By applying a SMAS, companies generate more accurate cost information thus fully costing products for internal management decision and reporting purposes.

Design/methodology/approach – This study used mixed methods combining quantitative and qualitative research approaches to collect and analyse data to triangulate findings.

Findings – The results of the study indicate that companies are intending to change to new management accounting practices while looking for ways to improve cost identification and measurement of environment and social impacts.

Research limitations/implications – This study is limited to Australian non-service manufacturing companies. As a SMAS is a newholistic management accounting approach, it provides companies with a way to create economic, environmental, and social value both immediately and in the future.

Originality/value – This study designs a SMAS conceptual model to contribute to the literature. By having a SMAS, companies could create more accurate cost information while fully costing products to effectively enhance management decisions on cost savings and greenhouse gas emission reductions.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to Published version due to publisher copyright policy.
Faculty / Department / School: Historic - Faculty of Business and Law - School of Accounting, Economics and Finance
Date Deposited: 24 Oct 2012 02:07
Last Modified: 14 Jul 2015 03:40
Uncontrolled Keywords: activity based costing (ABC); environmental management accounting; EMA; social management accounting; SMA; sustainability management accounting system; SMAS; environmental cost; social cost; Australia; activity based costs; management accounting
Fields of Research : 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150106 Sustainability Accounting and Reporting
Identification Number or DOI: 10.1108/19852511211237435

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