Damir Aščerić

Arijana Đulović

ACCT 391

26.02.2020

Environmental accounting

1. Do you think environmental costs and benefits can be accurately determined?

In our world, pollution is something that continues to pose serious problems since the industries

keep generating and disposing of their waste polluting our environment, which has major

consequence on both companies and households all around the world. In accounting words, these

environmental factors are called externalities because they are not attributed to those firms that

discharge their waste, but to those that suffer the damages from pollution, and the companies

internalize these costs. Precise measurement of a company's authentic environmental charges

now offers a wide range of reimbursement, such as the following. Firstly, it provides control with

a benchmark for tracking performance relative to peers or its personal past overall performance.

In addition, it can also serve as an external benchmark for investors concerned approximately the

environmental overall performance of companies as well as their finances. Also, another benefit

is that it could serve as a degree of a company's environmental publicity and the monetary risk

originating in its environmental overall performance. Environmental damage fees had been

expected conservatively, most effective air emissions of carbon dioxide, sulfur oxides, and
nitrogen oxides had been included, though energy flora additionally emit large portions of

dangerous particulates and trace factors of mercury and other toxic substances. Damages in

keeping with ton had been predicted conservatively from the economic studies literature.

2. Do issues such as the environment help management accountants to become more

strategically important members of an organization?

Businesses have turn out to be increasingly aware of the environmental implications of their

operations, merchandise and services. Environmental risks should not be ignored, especially now

when they are now such a huge part of walking a successful enterprise as product design or

marketing. Poor environmental behaviour can also have a real adverse effect on the enterprise

and its finances, and it carries significant punishment along the way such as fines, extended legal

responsibility to environmental taxes, loss in value of land, destruction of emblem values,

consumer boycotts, inability to stable finance, contingent liabilities, law suits, and damage to

company image, and once the company losses its reputation, it losses everything. Consequently,

managers are quite unaware of those costs, since they don't have any data with which to

manipulate them and haven't any incentive to reduce them. This is where the importance of

accountants lays. They are the ones who have to understand how all of these costs work, what

they mean, and be able to give recommendations on how to mitigate them or at least, reduce the

damage they can create. They also need to be able to formulate these strategies to upper

management so that they fully understand the importance of reducing pollution all together, if

not for the environment, then for the sake of their business because these factors can lead to great

costs that can reduce their ability to operate normally.