Monographic Section

DOI: 10.25115/eea.v39i11.5991
Volume 39-11, Dicember 2021 // ISSN: 1133-3197

The Role of Green Accounting Information in Improving the

Quality of Accounting Information
WASAN YAHIA AHMED1, SUAAD ADNAN NOAMAN AL-SHAMMARI2,
AHMED TAHER KADHIM AL-ANBAGI3
1
College of Administration and Economics, MUSTANSIRIYAH UNIVERSITY, IRAQ,
E-mail: Wasan_savini@uomustansiriyah.edu.iq
2
College of Administration and Economics, Accounting Department, UNIVERSITY OF BAGHDAD, IRAQ,
E-mail: Suaad.a@coadec.Uobaghdad.edu.iq
3
AL-MAMON UNIVERSITY COLLEGE, IRAQ. E-mail: Ahmed.t..kadhim@almamonucuc.edu.iq

ABSTRACT

The subject of green accounting is one of the modern topics in accounting science, which has received great
attention by researchers and writers because of its great role in measuring and disclosing environmental
activities and in line with the interests of internal and external users of accounting information. The research
stems from a fundamental problem that taking into account the costs of green accounting within the financial
statements of economic units would improve the quality of accounting information provided to users. To
achieve the goal of the research, a questionnaire was designed and submitted to the stakeholders of users of
information and employees of a number of economic units listed on the Iraq Stock Exchange, as well as the use
of different statistical methods and methods to extract results related to the role of information on green
accounting in improving the quality of accounting information provided by Before economic units. The research
reached several results, the most important of which was the need to take into account the costs of green
accounting and manifested within the financial statements of economic units, because of its role in improving
the quality of accounting information and commensurate with the interests of users, so it should work to
measure those costs and disclosed to contribute to Meet the wishes and interests of users of financial
statements.
Keywords: Green accounting; Accounting Information; Quality of accounting information.
JEL Classification: M

Received: July 24, 2021

Accepted: August 28, 2021
 Sección Monográfica

DOI: 10.25115/eea.v39i11.5991
Volumen 39-11, Diciembre 2021 // ISSN: 1133-3197

El Papel de la Información Contable Ecológica en la Mejora

de la Calidad de la Información Contable
WASAN YAHIA AHMED1, SUAAD ADNAN NOAMAN AL-SHAMMARI2,
AHMED TAHER KADHIM AL-ANBAGI3
1
College of Administration and Economics, MUSTANSIRIYAH UNIVERSITY, IRAQ,
E-mail: Wasan_savini@uomustansiriyah.edu.iq
2
College of Administration and Economics, Accounting Department, UNIVERSITY OF BAGHDAD, IRAQ,
E-mail: Suaad.a@coadec.Uobaghdad.edu.iq
3
DIJLAH UNIVERSITY COLLEGE, IRAQ. E-mail: Ahmed.taher@duc.edu.iq

RESUMEN

El tema de la contabilidad verde es uno de los temas modernos de la ciencia contable, que ha recibido una gran
atención por parte de investigadores y escritores debido a su gran papel en la medición y divulgación de las
actividades medioambientales y en consonancia con los intereses de los usuarios internos y externos de la
información contable. La investigación parte del problema fundamental de que tener en cuenta los costes de la
contabilidad ecológica en los estados financieros de las unidades económicas mejoraría la calidad de la
información contable proporcionada a los usuarios. Para lograr el objetivo de la investigación, se diseñó un
cuestionario y se presentó a los interesados de los usuarios de la información y los empleados de una serie de
unidades económicas que cotizan en la Bolsa de Valores de Irak, así como el uso de diferentes métodos
estadísticos y métodos para extraer los resultados relacionados con el papel de la información sobre la
contabilidad verde en la mejora de la calidad de la información contable proporcionada por Before unidades
económicas. La investigación llegó a varios resultados, el más importante de los cuales fue la necesidad de
tener en cuenta los costes de la contabilidad verde y que se manifiestan dentro de los estados financieros de
las unidades económicas, debido a su papel en la mejora de la calidad de la información contable y en
consonancia con los intereses de los usuarios, por lo que se debe trabajar para medir esos costes y divulgarlos
para contribuir a conocer los deseos e intereses de los usuarios de los estados financieros.
Palabras clave: Contabilidad verde; Información contable; Calidad de la información contable.
Clasificación JEL: M

Received: 24 de Julio de 2021

Accepted: 28 de Agosto de 2021
 Wasan Yahia Ahmed, Suaad Adnan Noaman Al-Shammari, Ahmed Taher Kadhim Al-Anbagi

1. Introduction

Since the end of the previous century and the beginning of this century, the interest in natural
resources has increased, fearing that they will run out on the one hand, and on the other hand, the
preservation of the environment, Which required the need to pay attention to the subject, in
addition to the new legislation and laws related to this. Since the science of accounting is a social
science that affects and is affected by the environment, it had a share in the interest in the study of
green accounting, which is one of the important and unresolved issues so far and in relation to the
issue of how to measure and disclose it.
The research aims to discuss the concept of green accounting and the problems associated with it,
represented by measurement, presentation and disclosure. And a statement of the role of green
accounting information in improving the quality of accounting information for economic units listed
in the Iraqi Stock Exchange. And the research problem was represented by a question: Does taking
into account the costs of green accounting within the items of the financial statements of economic
units improve the quality of the accounting information provided to users? The hypothesis of the
research was that the disclosure of green accounting information by the local economic units listed in
the Iraq Stock Exchange has a role in improving the quality of accounting information.

2. Green accounting concept

2.1 Definition Green accounting

The Green accounting is one of the important tools for interpreting the economic aspects of
natural and environmental resources. As well as designing the data and information presented in the
financial statements in a way that shows the costs resulting from environmental pollution or
depletion of natural resources exploited in the economic process (Stratton et al, 2012). Green
accounting is an important tool for understanding the impact of economic aspects on natural
resources and the environment. Designing the data and information provided in the accounts to
clarify the costs that occurred due to environmental pollution and the depletion of natural resources
participating in economic development, as well as creating awareness and knowledge about the
costs related to the environment, which in turn helps in identifying the necessary techniques to
reduce them, avoid those costs and improve environmental performance (Deegan, 2013; Morais et al
2021).
It is also known as an administrative tool used to achieve a variety of goals, the most important of
which are improving environmental performance, controlling costs, investing in clean technology,
developing environmentally friendly processes and products, forming decisions related to their
activities and business, and then carrying out the accounting treatment to be disclosed in the
financial statements (Azhar & AZMAN, 2021).

2.2 Green accounting

Green accounting aims at disclosing environmental performance, measuring natural resources,
calculating environmental costs and benefits, including them in financial reports, and showing the
interaction between environmental performance and economic performance of economic units.
comprehensiveness for the performance of these units. The writers and researchers have presented
a set of objectives represented by the following (Flayyih et al, 2021; Karmajouna et al., 2021):
I. Assisting the relevant authorities in the state by preparing long-term plans for natural resources by
preparing accounting reports that show the available balances of the state’s natural resources on a
specific date.
II. Providing data that helps in preparing statistical information related to natural resources in
preparation for the use of such information in achieving development goals and in preparing
statistics for international organizations and bodies that use them.

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 The Role of Green Accounting Information In Improving The Quality Of Accounting Information

III. Statement of the importance of social and environmental responsibility for the economic unit, as
the goal of maximizing profit alone is no longer valid to ensure its continuity, as the goal of
maximizing social welfare and providing a clean and pollution-free environment has become a
guarantee for the continuity and success of economic units.

2.3 Levels of applying green accounting

Green accounting can be applied through three levels (Al-Dahana et al., 2019), which are:
I. The level of the economic unit: The focus is on the internal and external parties that are concerned
with indicators of measuring the performance of the unit, and these parties are represented by the
lenders, investors and the management of the unit, as profit is no longer an indicator of the quality
of performance only, but it has become necessary for the unit to develop the accounting systems
in place to be able to deal with environmental issues.
II. The sector level: The focus is on the performance of the various economic sectors based on the
extent to which these sectors take into account the environmental aspects and considerations,
especially the sectors that deplete natural resources and pollute the environment, for example, the
industrial sector and the oil sector.
III. The state level: The focus is on measuring sustainable development because the aggravation of the
environmental problem leads to the need for indicators related to measuring health status, growth
rates and economic progress, for example, measuring human development and preserving human,
material and natural capital as a guarantee for the continuation of development for current and
future generations.

2.4 Application areas of green accounting:

Green accounting is applied in the following areas:
I. Green financial accounting: through which financial and environmental information is provided to
external users, for example, creditors, investors, government agencies, and associations for the
protection of the environment and society (Kamieniecka & Nozka, 2013).
II. Green audit: It means conducting a comprehensive analysis of the current situation on the extent
of the impacts of the economic unit sectors on the environment and examining the risk control
procedures (Al-khawaja, 2015).
III. Green taxes: They mean imposing taxes on economic units or people to achieve a clean livable
environment, and the tax should reflect the real green costs of the activity (Ali & Flayyih, 2021).
IV. Natural resource accounting, which means providing information about the stock of natural
resources as well as the activities of their use and the cost of their access (Torrenova, 2021).
V. Green management accounting: It means providing information about the financial and material
elements of the environmental performance of the economic unit and making better
improvements for these elements (Secondi, 2021).

2.5 Green accounting measurement approaches

The authors and researchers confirm that there are two approaches to measuring green
accounting, which are as follows (Bartelmus & Vesper, 2000):
I. The physical approach: According to this entry, a complete guide is prepared for the resources
available to the state and their areas of use, which means the expression of environmental
processes in the form of in-kind units that give quantitative and in-kind indicators of the increase or
decrease in the size of the available reserves of natural resources, as well as the changes that occur
in indicators and rates The prevailing local environment as a result of the use of such resources.
II. b- Monetary approach: This entry includes preparing financial and periodic accounting reports to
describe environmental events and the consequent depletion of natural resources, expressing
those events in the form of units of money.

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 Wasan Yahia Ahmed, Suaad Adnan Noaman Al-Shammari, Ahmed Taher Kadhim Al-Anbagi

2.6 Measurement problems in green accounting

The researchers confirm that there are many problems in measuring green accounting, and the
most important of them have been identified through the following (Hussain et al, 2021;
Abdulrahman, 2021).
I. How to determine the causal relationship between the offending behavior and the damage
resulting from it, as it is difficult to determine the distance of pollution and therefore the
difficulty of determining the compensation report for that, in addition to the possibility of
pollution occurring as a result of the interaction of several types of pollution.
II. The difficulty of definitively determining the perpetrator of the pollution, as it is difficult to
determine the cause of the damage, for example air pollution from fumes from cars or factories,
due to the multiplicity of persons responsible for these damages.
III. The difficulty of determining the damage to the environment, it is necessary to determine the
damage in order to estimate the value of compensation, which is a difficult issue to measure
because it is a case that varies from one case to another, in addition to the fact that the
measurement here is approximate and personal factors interfere with it.

2.7 Comparison of traditional accounting and green accounting:

Table 1 Comparison of traditional accounting and green accounting
no Items Traditional accounting Green accounting
Physical aspects of the economic Financial and environmental aspects and
1 Sides
unit. the relationship between them.
Report on environmental performance,
Reporting the financial position
2 Mission environmental obligations, and
of the economic unit.
environmental costs
Green financial accounting, financial
Financial, cost and management
3 Fields reporting, green management accounting,
accounting
green cost accounting
Financial statements and
4 Output Environmental reports
management accounting reports
Measurement
5 monetary units. monetary and quantitative units
units
6 Application Application is mandatory. Somewhat mandatory.
Source (Hernádi, 2012).

2.8 The relationship between the quality of accounting information and green accounting
The accounting custom is that accounting information of material importance and important
effects on users’ decisions are disclosed in the core of the basic financial statements. The scope of
disclosure expands and includes other quantitative and descriptive information that is disclosed by
other methods, provided that these methods are not considered an alternative or a means to avoid
showing some important information in the accounting financial statements (Hussain et al., 2016).
The different desires of users regarding what environmental information must be disclosed has
had a significant impact on the multiplicity of report models adopted in environmental disclosure .
Which resulted in the absence of a single standard model that can be relied upon in this field.
Therefore, the different level of users’ perception of information, as was previously indicated, made
the information that is appropriate for a particular party may not necessarily be appropriate for
another party, which put the list compilers in front of one of the two options is the first Preparing
one multi-purpose model that meets the needs of all users, while the second is preparing a model
from the lists, provided that each model serves a specific category (Burritt & Saka, 2006).
In spite of what was mentioned in the above, researchers believe that it is necessary to prepare
financial statements that provide accounting information of high quality, and this is achieved if the

5
 The Role of Green Accounting Information In Improving The Quality Of Accounting Information

qualitative characteristics are available to them, and therefore the information is appropriate when it
meets the needs of all users. On this basis, there must be sufficient information about green
accounting in the core The financial statements, if possible, to assist the environment-interested
parties in making their decisions.
In addition to the characteristic of honest representation, as the accurate measurement of
environmental costs and their presentation in the financial statements is considered a second reason
for the quality of accounting information.

3 The Results

3.1 The questionnair

The questionnaire was built of three paragraphs to clarify the role of green accounting
information in enhancing the quality of accounting information, As well as a paragraph that included
the personal Exchange, the investors and the beneficiaries of the information provided by the local
companies listed on the Iraq Stock Exchange. It is worth mentioning that only 75 distributed models
were valid for analysis, and a paragraph was added to the questionnaire allowing respondents to
modify them. And to express an opinion on that, and there were no substantial observations, and
this is what gave the questionnaire a constructive (external) form.
Likert scale was used when designing the questionnaire, allowing the respondent to be more
flexible in expressing his opinion. The scale has five levels, ranging from strongly agree to strongly
disagree, and a weight is given to each answer starting with (5) and ending with (1).

3.2 Analysis of the questionnaire form:

Table 2. Personal data
N0 Variable property Frequency Ratio
male 52 69%
1 SEX
Female 23 31%
TOTAL 75 100%
34 – 25 31 %41
44 – 35 12 %16
2 AGE
54 – 45 22 %29
More than 55 10 %14
TOTAL 75 %100
From 5-10 years 31 41%
3 years of experience in stock trading From 10-15 years 24 32%
More than 15 years 20 27%
TOTAL 75 100%
Source: Prepared by the researchers based on the questionnaire.

3.3 An analysis of the role of green accounting information in enhancing the quality of accounting
information
It is clear from Table (3) that the respondents’ answers about this paragraph generally tended
towards (strongly agree and agree), as the percentage for the first question was 71%, for the second
question 85%, for the third question 84%, for the fourth question was 82%, for the fifth question was
79%, while the percentage for the fourth question was 79% The sixth question is 79%.

6
 Wasan Yahia Ahmed, Suaad Adnan Noaman Al-Shammari, Ahmed Taher Kadhim Al-Anbagi

Table 3 Sample opinions on the role of green accounting information in enhancing the quality of accounting
information
Strongly I do not Strongly
No Question Agreed neutral
agree agree disagree
Information about green accounting 30 23 14 4 4
1 is useful in the decision-making
%40 %31 %19 %5 %5
process.
Green accounting information 32 24 12 4 3
2 enhances the quality of accounting
%43 %32 %16 %5 %4
information.
Green accounting information helps 31 32 7 3 2
3 ensure accounting information is
%41 %43 %9 %4 %2
accurate
Green accounting information 29 32 10 2 2
represents one of the most
important information through
4
which economic units are evaluated %39 %43 %13 %2 %2
for the services they provide to
protect the environment.
Green accounting information 33 26 11 3 2
represents one of the most
5 important information for
%44 %35 %15 %4 %2
evaluating the management of
economic units
The failure to disclose green 35 24 10 3 3
accounting information leads to the
6 concealment of a lot of information
%47 %32 %13 %4 %4
that helps users in making their
investment decisions.
Source: Prepared by the researchers based on the data of the questionnaire and the outputs of the (Excel) program.
Table 4 Descriptive statistics
Arithmetic standard coefficient of Relative
No Question
mean deviation difference importance
Information about green accounting is useful in the
1 3.7200 1.221 1.21 6
decision-making process.
Green accounting information enhances the quality
2 3.9600 1.120 1.69 3
of accounting information.
Green accounting information helps ensure
3 3.9067 1.152 1.54 5
accounting information is accurate
Green accounting information represents one of
the most important information through which
4 4.0133 .892 1.53 2
economic units are evaluated for the services they
provide to protect the environment.
Green accounting information represents one of
5 the most important information for evaluating the 4.2400 .997 1.55 1
management of economic units
The failure to disclose green accounting information
leads to the concealment of a lot of information
6 3.9680 1.042 1.31 5
that helps users in making their investment
decisions.
Source: Prepared by researchers, depending on the outputs of the (spss) program.

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 The Role of Green Accounting Information In Improving The Quality Of Accounting Information

Table 5 Internal honesty measure

correlation
No Question
coefficient
1 Information about green accounting is useful in the decision-making process. 0.94
2 Green accounting information enhances the quality of accounting information. 0.97
3 Green accounting information helps ensure accounting information is accurate 0.98
Green accounting information represents one of the most important information
4 through which economic units are evaluated for the services they provide to 0.95
protect the environment.
Green accounting information represents one of the most important information
5 0.98
for evaluating the management of economic units
The failure to disclose green accounting information leads to the concealment of a
6 0.93
lot of information that helps users in making their investment decisions.
Source: Prepared by researchers, depending on the outputs of the (spss) program.
Table 6 Stability Measurement
Alpha
N
Question Kornbach
o
coefficient
1 Information about green accounting is useful in the decision-making process. 0.968
Green accounting information enhances the quality of accounting
2 0.957
information.
Green accounting information helps ensure accounting information is
3 0.950
accurate
Green accounting information represents one of the most important
4 information through which economic units are evaluated for the services 0.966
they provide to protect the environment.
Green accounting information represents one of the most important
5 0.970
information for evaluating the management of economic units
The failure to disclose green accounting information leads to the
6 concealment of a lot of information that helps users in making their 0.955
investment decisions.
Stability Measurement .9800
Source: Prepared by researchers, depending on the outputs of the (spss) program.

The reliability coefficient reached (0.980) for the paragraph of the role of green accounting
information in enhancing the quality of accounting information (6), which is greater than the
standard stability coefficient of (0.600), and that question No. 3 contributed more than others to the
stability of the paragraph’s questions and if it is concealed, the reliability coefficient will decrease to
(0.950). Based on the foregoing, green accounting information has a role in enhancing the quality of
accounting information provided by local companies listed in the Iraq Stock Exchange.

4 Conclusion

The science of accounting is a product of the requirements of the environment in which it

operates. It is necessary to provide information that demonstrates the social responsibility of the
economic unit towards the environment. It was necessary for the emergence of green accounting, in
addition to the fact that the goal of maximizing profit is no longer the goal of the unit to ensure its
continuity. Maximizing social welfare and providing a clean environment free of pollution is the basis
for the success of economic units and may even be considered their competitive advantage.

8
 Wasan Yahia Ahmed, Suaad Adnan Noaman Al-Shammari, Ahmed Taher Kadhim Al-Anbagi

There are shortcomings in the disclosure of green accounting and this is caused by the
inappropriateness of the current model used for financial statements in the disclosure of information
related to green accounting. The application of green accounting reflects positively on many parties,
for example, the health of workers, the work environment, or even the entire environment.
Therefore, modern equipment must be used to measure pollution and the extent of damage that will
be caused to the environment as a whole as a result of the operation of the economic unit.

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