Journal of Economics and Sustainable Development www.iiste.

org
ISSN 2222-17 !"aper# ISSN 2222-2$%% !&nline#
'ol.%( No.1)( 21)

**
Environmental Accounting and Social Responsibility Disclosure
on the Earning Capacity of Nigerian Manufacturing Firms

+eredugo( Sunn, +iobele-
Department of .ccounting( /niversit, of 0alabar( 0ross 1iversstate( Nigeria
-E-mail of t2e corresponding aut2or3 suntap27)74,a2oo.com

Abstract
52is stud, assessed environmental accounting and social responsibilit, on t2e earning capacit, of selected
Nigerian manufacturing companies. 52e stud, 2ig2lig2ted some environmental relatedcosts incurred in
preventing( reducing or repairing damages to t2e environment and social cost incurred to ac6nowledge
organi7ations8 responsiveness to t2e societ, at large. Emp2asis was also carried out to ascertain t2e e9tent of
compliance b, Nigerian companies on environmental accounting and social responsibilit, wit2 t2e International
Standard of .ccounting and 1eporting disclosure !IS.1# re:uirements. Data were collected from t2ree
manufacturing firms in Nigeria t2roug2 t2e administration of :uestionnaires and researc2ers8 c2ec6list. 52ese
data were tested using population t-test( ordinar, least s:uare and multivariate statistics and was revealed t2at
t2ere is a significant difference between t2e compliance level of Nigerian companies on environmental
accounting and social responsibilit, disclosures and t2e IS.1 re:uirements.Environmental cost pro9, as3 waste
management cost( pollution abatement cost( and ;ines < "enalt, significantl, affect companies8 earning
capacit,. It was recommended t2at firmss2ould be sensitive to t2eir environmental activities( and account for all
environmental related costand t2e, s2ould desist from environmental pollution and degradations.
Keyords! Environmental .ccounting( Social 1esponsibilit,( =aste management cost( pollution abatement cost(
;ines < "enalt,

"#" $ntroduction
&rganisms and t2eir environment constantl, interact( and bot2 are c2anged b, t2is interaction. >i6e all ot2er
living creatures( 2umans 2ave clearl, c2anged t2eir environment( and t2e, 2ave done so generall, on a grandeur
scale t2an 2ave all ot2er species. Some of t2ese 2uman-induced c2angessuc2 as t2e destruction of t2e world8s
tropical rain forests for economic e9pansion and pollution2ave led to altered climate patterns( 2abitat destruction(
species e9tinction( and environmental degradation !?immerman( 2$#. .uer !21# suggested t2at 6nowledge
about t2e environment cost and t2eir c2allenges s2ould be ade:uatel, accounted for(in compliance wit2
standards@ as a moral commitment to environmental stewards2ip and t2e desire to promote good relations wit2
t2e residents of local communities( w2ile t2e man, wa,s in w2ic2 environmental costs( losses or benefits ma, go
unrecorded in traditional accounting s,stems is becoming obsolete.
&demer2o !2$# added t2at t2e unwise use of t2e natural environment due to ignorance( neglect( povert,(
overpopulation and greed amongst ot2ers as led to t2e degradation of environment. 52e costs !degradation#
occur as Nigerians attempt to adAust t2eir seemingl, endless wants and desires for food( s2elter( recreation(
infrastructural facilities( and so no to t2e land and ot2er resources available to t2em. 52ese land use activities
contribute to t2e overall development of t2e countr, but t2e, e:uall, produce negative impacts on t2e
environment. 52ese negative impacts are referred to as environmental costs !degradation# w2ic2 implies abuse of
t2e environment due to improper resources management.
.ccountants 2ave begun to define t2e ecological issues as falling wit2in t2eir range of s6ills. ;or e9ample(
0IB. !1CC7# argued t2at t2e forward t2in6ing management accountant s2ould be ta6ing an active role in
environmental management( as 2e or s2e 2as 6e, s6ills to appl, to t2e process. 52e basic financial accounting
model is an impediment to c2ange because it onl, records and emplo,s t2e data w2ic2 arise from a transaction
w2ic2 generates a price. "rices are onl, generated w2en propert, rig2ts are transferred. 52e maAorit, of t2e
matters t2at are of concern in ecolog, are t2ings over w2ic2 propert, rig2ts do not e9ist. .s a result( t2e basic
financial accounting model ignores t2ose !Dra,( 2E#. .lt2oug2 t2ere is an active and essential role t2at
accountants can pla, in t2e development of sound environmental and reporting procedures( muc2 wor6 must be
done to develop a more compre2ensive reporting s,stem involving bot2 :uantitative and :ualitative tec2ni:ues.
52e /nited Nations Environment "rogramme !/NE"# 2as directed its attention to issues of environmental
disclosures. 1ecommendations 2ave been made for companies to disclose@ 6e, environmental issues facing t2e
compan, and plans for addressing t2em@ progress in addressing c2anges re:uired b, future legal re:uirements@
actual and proAected-levels of environmental e9penditure@ energ, use( materials use( emissions and waste
disposal routes@ financial estimates of savings and benefits flowing from pro-environment efforts@ and an
independent audit statement !.dams( 2#.
52e manufacturing and related industries occup, a 6e, position in t2e economic life of a nation. 52ese industries
suppl, a vast range of products w2ic2 find t2eir wa,s into a wide spectrum of 2uman activit,. Ban, of t2ese
Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-17 !"aper# ISSN 2222-2$%% !&nline#
'ol.%( No.1)( 21)

*7
products( w2en present in t2e environment are potentiall, 2a7ardous( some being e9plosive( flammable( to9ic
and ot2er corrosives etc.
.not2er significant problem is t2e complete absence of environmental reporting standards( malfunctioning of t2e
environmental management s,stem and failure of our real sector to provide full accounting for environment costs
incurred. It is dis2eartening to note t2at environmental management s,stem is undul, comple9( s6ewed( poorl,
administered( largel, ine:uitable and loaded wit2 undul, large number of overlapping penalties for non-
compliance. 52e s,stem is furt2er e9acerbated b, poor policies( inconsistencies in legal application and low
impact on t2e econom,. It is in view of t2is e9posure t2e researc2er tested t2e following 2,pot2eses3
1. Fo3 52ere is no significant difference between t2e compliance level of Nigerian companies on
environmental accounting and social responsibilit, disclosures and t2e International Standard of
.ccounting and 1eporting disclosure re:uirements.
2. Fo3 =aste management cost( pollution abatement cost( and ;ines < "enalt, do not significantl, affect
companies8 performance.
E. Fo3 52ere are no conse:uences to non-compliance wit2 environmental and social responsibilit, disclosure
re:uirements of accounting standards.

%#& 'iterature revie
52is researc2 builds on several literatures.Nennig !2)#elaborating on t2e GEnvironment performance t2eor,H(
averred t2at( t2e t2eor, focuses on t2e abilit, of t2e compan, to manage environment effects. Environmental
effects or impacts are t,pes of actual or potential environmental damage caused to t2e environment. 0onsistent
wit2 t2is t2eor,( .de6unle !1CC$# documented t2at an, compan, see6ing to be efficient in order to compete
strongl, in t2eir integral part of t2e communit, s2ould be considering t2eir position on t2e environment and
report all relevant information and cost incurred on suc2 responsibilit, to t2e environment. 52e interests of
sta6e2olders t2oug2 var, but( in most cases( a close lin6 wit2 economic( commercial and financial implications
is alwa,s ensured.
%#" Environmental legislation in Nigeria
Nigerian Dovernment8s ;ederal E9ecutive 0ouncil !;E0# approved t2e development of a 01 polic, for t2e
countr,. 52e Binistr, of National "lanning 0ommission said t2e Dovernment would establis2 minimum
environmental and social standards for all corporations focused on t2eir core competencies to encourage
GsensibleH 01 investment and guard against being Ga financial drain on businessesH !Nigerian Direct(
2$#.+asicall, before t2is period( t2ere was a near-total lac6 of public awareness concerning environment
protection and development. Issues as biodiversit, conservation( effluent limitations( pollution abatement and
sustainable development of Nigeria natural resources did not form part of t2e general public discourse
!1ut2erford and 52omas( 1CCC#. 52e absence of suc2 deliberate polic, naturall, meant t2e non-e9istence of an
agenc, entrusted wit2 t2e responsibilit, for t2e protection and t2e development of t2e environment. 52e resultant
effect was t2at environment issues were reduce to matters of periodic litigation between aggrieved individuals
and communities on t2e one 2and and t2e oil producing companies on t2e ot2er in t2e event of damage
occasioned to fis2es and t2e environment t2roug2 oil spillages or damming of t2e water wa,s. &t2ers include
litigation on land pollution and waste mismanagement.
&bi !2E# avers t2at Ireal environment legislation in Nigeria was a product of National emergenc,I. Series of
additional decreeon environmental protection was found necessar,..ccordingl,( federal environmental
protection agenc, !;E".# promulgated b, t2e federal government found it necessar, to developed instructions
in t2e combating environmental degradation among ot2ers to include pollution .batement in industries facilities
generating waste regulations under S.1.Cof 1CCC constitution specif,ing t2at3 restrictions are imposed 2ereunder
on t2e release of to9ic substances and re:uirement stipulated3Bonitoring of pollution to ensure permissible limits
are not e9ceeded@/nusual and accidental disc2arges@0ontingenc, plan@Denerators liabilities@ and Strategies of
waste reduction and safet, of wor6ers.
2.2 $nternational 'egislations
In a rapidl, globali7ing world( interest in corporate responsibilit, continues to grow among a broad range of
enterprises( investors( civil societ, actors and ot2er sta6e2olders. 52e /nited Nations 2as underta6en various
actions to respond to t2is interest and to promote positive corporate contributions to sustainable
development.52is form of reporting provides s2are2olders and ot2er sta6e2olders wit2 a more 2olistic view of an
enterpriseJs activities and performance. 52is serves t2e goal of all corporate reporting( w2ic2 is to increase our
understanding of a compan,Js performance( and t2e :ualit, of its management.
52e demand for more information on corporate responsibilit, issues is becoming increasingl, sop2isticated( wit2
greater calls for concise and comparable reports. 52is is an area w2ere /N05.D8s Intergovernmental =or6ing
Droup of E9perts on International Standards of .ccounting and 1eporting !IS.1# pla,s a valuable role.52e,
developed a framewor6 on IS.1 to promote t2e 2armoni7ation of best practices in corporate reporting( wit2 a
view to facilitating and en2ancing positive corporate contributions to t2e economic and social development of
Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-17 !"aper# ISSN 2222-2$%% !&nline#
'ol.%( No.1)( 21)

*$
2ost developing countries. 52is guidance serves as a practical voluntar, tool t2at assists enterprises in t2eir
efforts to communicate wit2 investors and ot2er sta6e2olders.
52is guideline on environmental reporting and disclosure is 2owever not devoid of measurement of
environmental cost in t2e financial statement. If firms underta6e measures to reduce environmental damage( t2e
associated cost is e9pected to be c2arged to t2e profit and loss account. Same can be said on pollution abatement
cost and fine and penalties paid for non-conformit, wit2 relevant environmental standards.
%#( Environmental costs and conse)uences
Environmental costs consist of environmental measures and environmental losses. 52e, include clean-up costs(
costs of rec,cling materials or conserving energ,( closure costs( capital e9penditure and development
e9penditure.52esecosts are incurred in preventing( reducing or repairing damage to t2e environment and
conserving resources. Fowever( environmental losses are costs w2ic2 bring no benefits to t2e business. Suc2 as(
fines( penalties( compensation( and disposal losses relating to assets w2ic2 2ave to be scrapped or abandoned
because t2e, damage t2e environment !=rig2t <Noe( 2*#.Farrington !2# added t2at( environmental costs
is t2e environmental damage costs to t2e environment and its users as a result of alternative competing use.
52ere is also t2e general concern t2at environmental cost reduces operating fle9ibilit,( slow productivit,
improvements in general !Jos2i( 1CC7#.
2.E.1 .ccounting for environmental costs
52oug2( t2e issues of environmental and social reporting are not e9plicitl, provided for in t2e companies and
allied matters act but 2as been catered for b, bot2 local and international standards li6e IS.1( Dlobal reporting
Inde9 !D1I#.0orporate performance is no longer seen simpl, as being e:uivalent to and conse:uentl,
measurable in terms of profitabilit, alone. Information on t2e accounting for environmental costs is now
re:uired.Eac2 t,pes of cost are to be considered as it arises so as to accord it t2e appropriate treatment in line
wit2 Denerall, .ccepted .ccounting "rinciples !D.."s#. Some e9amples of environmental costs and t2e wa,
t2e, s2ould be treated according to I0.N !1CCC# are3
1. ;ines and penalties paid of non-compliance wit2 environmental regulations are c2arged to t2e profit and
loss account in t2e period in w2ic2 t2e, are incurred( regardless of w2et2er t2e activities t2at resulted in
t2e penalties 2ad ta6en place in an earlier accounting period@
2. If t2e entit, 2as to embar6 on fundamental reorgani7ations or restructuring or to discontinuing
particular activities in order to protect t2e environment( t2e costs !if material# s2ould be treated as
e9ceptional items and s2own on t2e profit and loss account@ and
E. If researc2 and development e9penditure is incurred in effect of environmentall, friendl, products(
processes ort services( t2e provisions of t2e standard on accounting for researc2 and development
s2ould be applied. 52is was formerl, I.S No.C but 2as been superseded b, I.S N.E$ !International
.ccounting Standard on Intangible .ssets#.
%#* Environmental related cost
2.).1 "ollution abatement cost
"ollution abatement is a cost borne b, man, businesses for t2e removal andKor reduction of an undesirable item
t2at t2e, 2ave created. .batement costs are generall, incurred w2en corporations are re:uired to reduce possible
nuisances or negative b,products created during production.E9amples of abatement costs would be t2e pollution
reduction costs of paper mills and noise reduction costs of manufacturing plants.
2.).2 =aste management cost
=aste management involves sensing w2at is t2ere( sorting( separating( transforming( returning to service w2at
can be used and properl, disposing w2at is left !1ose( 22#. .ccording to D2us2( !2C# wastes are inevitable
2uman activit,. 52e, are eit2er a b,-product of initial production process or t2e, arise w2en obAects or materials
are discarded after t2e, 2ave been used.
Novic6 !2C# enumerated t2e accounting for waste management in an, communit,( town or cit, as follows3
associate cost on t2e reduction in t2e speed of sanitation related diseases( reduction onoccurrence of non-
communicable diseases and reduction on environmental pollution !degradation of land( water and air# etc..ll
organi7ations are e9pected to ma6e a report on t2e associated cost incurred in t2e management of waste. 52is is
because sta6e2olders re:uired t2is information to evaluate t2e organi7ation8s responsibilit, to environmental
matters and t2e activities t2e organi7ation must 2ave engaged in to circumvent environmental degradation.
Fowbeit t2e cost incurred b, t2e organi7ation reduces t2e organi7ations performance but t2ese are e9penses t2at
s2ould be better incurred to furt2er accomplis2 t2e aim of satisf,ing consumer bot2 in t2e production of goods
and services and engaging in environmentall, friendl, activities.
2.).E ;ines and penalt,
52ese are cost borne b, an organi7ation for t2e violation of t2e rule and regulation guiding specific
environmental issues. "enalt, and associated costs incurred as e9pense are e9pected to be full, disclosed in t2e
organi7ations8 financial statements. ;ines and penalt, 2as an inverse relations2ip wit2 companies8 performance(
as it reduces profit and t2e return on assets.
Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-17 !"aper# ISSN 2222-2$%% !&nline#
'ol.%( No.1)( 21)

*C
%#+ Social responsibility accounting and reporting
Social accounting is an e9tension of corporate reporting. Social accounting is t2e call b, t2e public(
environmentalists and 2ost communities for reporting evidence of sociall, desirable policies on t2e part of
business enterprise.It also include reporting of t2ose costs and benefits w2ic2 ma, or ma, not be :uantified in
monetar, terms arising from economic activities and substantiall, borne or receive b, t2e communit, at large or
particular groups not 2olding a direct relations2ip wit2 t2e reporting entit, !.le9ander < +ritton( 2#. Social
accounting ma, also be defined as t2e measurement and reporting of internal and e9ternal information
concerning t2e impact of an entit, and its activities on a societ, !Dago( 1C$%#.

(#& Research Methodology
52e researc2er used t2e e9-post facto and surve, design. 52is c2oice of e9-post facto was based on t2e fact t2at
t2e independent variables@ =aste Disposal 0osts !=D0#( ;ines and "enalties !;"#( "ollution .batement 0osts
".0# in t2e companies8 financial reports used( alread, e9ist and t2e researc2er 2ad no control over t2em. 5o
ac2ieve t2is( five ,ears financial reports of selected companies were 2owever utili7ed in order to evaluate t2e
effect of environmental related cost on compan,8s performance. Eac2 annual report was carefull, scrutini7ed
and scored as a disclosure inde9 based on a researc2er-developed c2ec6list.Fowever as a supplement to t2e e9-
post factor( t2e surve, researc2 design was adopted to 2elp in eliciting respondents8 view on t2e conse:uences of
noncompliance wit2 relevant reporting standard on environmental accounting and social responsibilit,.
In order to gain t2e advantages of an in-dept2 stud, and effective coverage( samples were drawn from t2e
manufacturing firms operational in >agos State t2at s2ow evidences of compliance wit2 environmental
accounting and social responsibilit, disclosure re:uirements between 2$ to 212. Fowever ( t 2r ee
compani es met t 2ese r e:ui r ement and t 2e, i ncl ude3 N.S0&B "l c. ( Dangot e 0ement "l c. (
and Fone,wel l ;l our Bi l l s@ w2i l e t 2e sample si7e for t2e respondents used from t2e t2ree companies
was 2*@ and t2eAudgmental sampling tec2ni:ue was also used.
5o test F,pot2eses one( population t-test was utili7ed on t2e G212H financial reports of t2e companies to
ascertain t2e e9tent of compan,8s disclosure level on international standards of accounting and reporting. 52e
researc2er developed c2ec6list based on International Standard of .ccounting and 1eporting. 52e IS.1
c2ec6list is a list of 27 items constructed based on past literature and contemporar, issues as outlined in
International Standard of .ccounting and 1eporting !IS.1#. 52e items are labeled 1 to 27( comprising items on
disclosures on environmental liabilities and cost( +oard level responsibilit, on pollution abatement( disclosure of
cost on pollution abatement( disclosure of cost on waste management( a commitment to environmental reporting(
etc.Eac2 reporting item on t2e c2ec6list is assigned a value of LE8 if it is reported wit2 details and related cost(
and L28 if t2e item is reported wit2 details wit2out cost( and 1if t2e item is disclosed wit2out detail w2ile relevant
items not disclosed are coded . 52e score !inde9# for eac2 standard is t2e ratio of actual reporting disclosure
divided b, applicable reporting.
F,pot2esis two was tested using multiple linear regression3 M N b
o
O b
1
9
1
O b
2
9
2
O b
E
9
E
O e
i..
52e full
specification of t2e regression e:uations are as follows3 P

Nregression intercept@ P
i
Nparameters to be
estimated@AN1.....E ! number of samples# and Q
A
N t2e error term.

52e La priori e9pectations are3
P
1
R @ impl,ing t2at t2e 2ig2er t2e =aste Disposal 0osts !=D0#( t2e lower t2e profitabilit,(
P
2
R @ impl,ing t2at t2e 2ig2er t2e ;ines and "enalties !;"#( t2e lower t2e profitabilit,(
P
E
R @ impl,ing t2at t2e 2ig2er t2e "ollution .batement 0osts !".0#( t2e lower t2e profitabilit,.
F,pot2esis t2ree on t2e ot2er 2and was tested using B.N&'.. 52e>evene8s test of e:ualit, of error variances
was emplo,ed to c2ec6 t2e assumption of e:ualit, of variance for B.N&'..=il6s8 >amda was also emplo,ed
to c2ec6 for statisticall, significant differences.
*#" Data presentation
Data e9tracted from t2e companies8 financial statements !insert table 1# include accounting information on profit
after ta9 !".5# and environmental related cost !=aste Disposal 0ost( ;ine and penalt,( pollution abatement
cost#.
*#% ,est of hypotheses
-ypothesis one!
F
o
3 52ere is no significant difference between t2e compliance level of Nigerian companies on environmental
accounting and social responsibilit, disclosures and t2e International Standard of .ccounting and
1eporting disclosure re:uirements.
/sing t2e population t-test!see table E#( t2e t- tabulated was 1.$E w2ile t2e calculated t-value3 11.*%. Diven t2at
t2e calculated t-statistic is greater t2an t2e table value( t2at is( 11.*%>1.$E wit2 t2e degree of freedom( n-1 !i.e.
27-1 N 2*# at %S level of significance( F

is reAected and F
1
is accepted. It is t2erefore concluded t2at t2ere is a
significant difference between t2e compliance level of Nigerian companies on environmental accounting and
social responsibilit, disclosures and t2e International Standard of .ccounting and 1eporting disclosure
Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-17 !"aper# ISSN 2222-2$%% !&nline#
'ol.%( No.1)( 21)

7
re:uirements.
-ypothesis to!
F

3 =aste management cost( pollution abatement cost( and ;ines < "enalt, do not significantl, affect
companies8 performance.
/sing t2e t-statistic to test for t2e significance of t2e estimated coefficients !insert table 2#@ =D0 was positive
and significantl, affect companies8 performance wit2 a t-statistic of *.E1and p-value of .1 Ttcal N *.E1 R t
.% N 1.*C7U. 52is 2owever contradicts our La priori e9pectation w2ic2 specifies t2at t2e 2ig2er t2e =aste
Disposal 0osts !=D0#( t2e lower t2e profitabilit,. 52e data on fine and penalt, was in consonant wit2 our La
priori e9pectation( as it 2as a t-statistics of -E.EE t2at is negativel, significant Ttcal N -E.EER t .% N 1.*C7U.
Same can be said for pollution abatement costs wit2 a t-value of-E.C)Eand a p-value of .2C Ttcal N --E.C)E R t
.% N 1.*C7U. +, t2ese results( it can be concluded t2at waste management cost( pollution abatement cost( and
fines < penalt, significantl, affect companies8 performance. F

is t2erefore reAected and F
1
isaccepted.
-ypothesis three!
F
&
3 52ere are no conse:uences to non-compliance wit2 environmental and social responsibilit, accounting
wit2 t2e.disclosure re:uirements of t2e accounting standards.
52e multivariate test of significance is conducted using =il6s8 >amda !see table %#. 52e result s2ows t2at t2e ;-
value is 1$.$CE
a
( partial eta s:uared N.222( s2owing large effect( w2ile t2e =il6s8 >amda value is .** wit2 a
significant value of .@ w2ic2 is lower t2an .%. 52erefore( t2ere is a statisticall, significant difference in t2e
perception of N.S0&B "lc.( Dangote 0ement "lc. and Fone,well ;lour Bills "lc. on t2e conse:uences of non-
compliance wit2 environmental and social responsibilit, accounting disclosure re:uirements of t2e accounting
standards. F

is t2erefore reAected and F
1
accepted.

+#" Summary
Data were collected from t2ree manufacturing companies in >agos State@ w2ile t2ree 2,pot2eses were raised and
tested using( population t-test( ordinar, least s:uare regression tec2ni:ues and multivariate statistics.52e stud,
s2owed t2at t2ere is a significant difference between t2e compliance level of Nigerian companies on
environmental accounting and social responsibilit, disclosures and t2e International Standard of .ccounting and
1eporting disclosure re:uirements b, Nigerian companies. 52is is because Nigeria is ,et to full, inculcate t2ese
environmental accounting and social responsibilit, related standards.
52e stud, also revealed t2at t2ere is a relations2ip between environmental costs and corporate performance. It
was 2owever discovered t2at t2ere is a positive relations2ip between waste disposal cost and t2e performance(
t2oug2 t2is result was in contradiction to t2e a priori e9pectation( it does not portent ama7ement. 52is is because
in Nigeria( not2ing is realisticall, true( as most financial information presented b, companies( must 2ave been
doctored to suit t2eir purpose of meticulousl, circumventing vital information for obvious reasons. It was also
found out t2at( fines and penalties paid( pollution abatement costs 2ave a great influence on t2e reported profits
of a compan,( and t2at non-compliance wit2 environmental regulation b, firms could cause serious damage or
setbac6( to t2e organi7ations.
+#% Conclusion and recommendations
+ased on t2e findings of t2is stud,( it was concluded t2at t2ere is a significant relations2ip between t2e
environmental costs and t2e earning capacit, a firm. It is also discovered t2at( t2ere is a complete absence of
accounting standard on environmental reporting. It is t2erefore recommended t2at t2e use of International
Standard of .ccounting and 1eporting s2ould be full, adopted in Nigeria( as a legal framewor6 to be followed
b, companies on environmental accounting and social responsibilit,( and non-compliance s2ould attract
sanctions from relevant aut2orities.52e ;inancial 1eporting 0ouncil !;10# of Nigerian s2ould collaborate wit2
ot2er professional bodies( t2e academia and ot2er relevant sta6e2olders on relevant sanction t2at would ensure
t2ere is compliance and transparenc, in t2e process.
Banufacturing firms in Nigeria s2ould be sensitive to t2eir activities and strive as muc2 as possible to desist
from t2ose environmental activities t2at would conse:uentl, result in environmental degradation.0ompanies
s2ould also maintain a good legal compliance record in order to avoid ris6ing criminal actions t2ereb, resulting
in financial liabilities or costs@ and wastes s2ould be treated and well-2andled( and s2ould not be left to pollute
t2e environment t2ereb, incurring liabilities or disposal cost( settlement of w2ic2 will reduce t2e corporate
profit.;irms s2ould also develop clear views of societ,8s performances and priorities in order to plan activities
t2at will ma6e social impacts and meaningful reports on t2eir environmental performances.

REFERENCES
.dams( ;. J. !2#. "articulate pollution trends in Nigeria. Journal of Regional Science and Urban Economics(
27 !1#( $7-17.
.de6unle( +. J. !21#. Human Resource Accounting. >agos3 /nilag "ress >td.
.le9ander( D. < +ritton( .. !2#. Financial Reporting( %
t2
Edition( >ondon3 52omas >earning "ublication.
Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-17 !"aper# ISSN 2222-2$%% !&nline#
'ol.%( No.1)( 21)

71
.uer( B. 1. !21#. Sense of place and t2e p2,sical senses in outdoor environmental learning. In 5eac2ing
Environmental >iterac,3 .cross 0ampus and across t2e 0urriculum( +loomington( IN3 Indiana
/niversit, "ress( 1)2-1)C.
02artered Institute of Banagement .ccountants !1CC7#. Statement of the Account Principles Boar 3. >agos3
Institute of Banagement .ccountants.
Dago( I. /. !1C$%# G'aluation3 .n Economic 0ontribution to Environmental Degradation 1emediation of t2e
Niger DeltaH African Journal of Environmental Studies( 1 !E#( 1E V 1E%.
D2us2( . !2C# Environmental science for environmental management >ondon3 "earson Education.
Dra,( =. +. !2E#. Pollution Abatement !osts" Regulation and Plant#$evel Productivit%. =as2ington3 0entre
for Economic Studies( /.S. Department of 0ommerce.
Farrington( =. 1. !2#. 52e cost of air pollution abatement. .pplied Economic Journal( 2C( 7%C-77)%.
Jos2i( &. +. !1CC7#. &he marginal effects of environmental regulations on the manufacturing sector. "rinceton3
"rinceton /niversit,.
Nennig( 1. B. !2)#. &he Economics of Environmental Regulation. 0ambridge3 Farvard /niversit, "ress.
Nigeria Direct !2$#. ;E0 o6a,s n17.)b to settle fuel transporters8 bridging claims. 27 Ba,.
2ttp3KKwww.nigeria.gov.ngKN1Ke9eresK*CD;7+$E-;E%-).;C-.0$*-1*2E%C0E7;CE.2tmWidNE2)2@
Novic6( 1. !2C#. &verview of environments and 2ealt2 in Europe in t2e 1CCs. Deneva3 =F&.
&bi( E. .. !2E#. Accounting &heor%3 . conceptual and practical guide. "ort Farcourt3 .l2eri Integrated
Services
&demer2o( B. !2$# Pollution Abatement !osts and E'penditures. Journal of Public Economics" ()( 1CC-21*
1ose( F. !22#. Education of *omen for national development. Ibadan3 Evans +rot2ers.
1ut2erford( ;. ". < 52omas( 0. =. !1CC$#. &he costs of climate protection. =as2ington3 =orld 1esources
Institute.
=rig2t( 0. J. <Noe( +. ;. !2*#. 52eor, of Environment and Planning. India3 "rentice Fall
?immerman B. !2$#. +Environment, Bicrosoft Encarta( 2C T-.-/ 0icrosoft !orporation All rights
reserved

A..END$/
,A0'E "! "rofitabilit,and Environmental costs of N.S0&B Nig. "lc.( Dangote cement and Fone,well !2$-
212#
1ear
.A,
23&&&
waste disposal cost
23&&&
;ines and penalties paid
23&&&
"ollution abatement cost
23&&&
N.S0&B
Dangote
0ement Fone, well N.S0&B
Dangote
0ement
Fone,
well N.S0&B
Dangote
0ement
Fone,
well N.S0&B
Dangote
0ement
Fone,
well
2$ 1(2C$(2CE 17(C*(11 $1*()%2 E%$* C$2E EE %C7* %% E)7* 1* C$ )%
2C 1($)2(E)* )7(2%1(E2* 217(11% )2C **7 2E - 1$E) - %12$ %12
21 1(*)$(E21 1*(*%()C 1(17%(C22 21% *E 1) %%2 E$% E21 - 2* -
211 2(2E(*C% 12%()7$(C*2 2()C2(EC7 )E 11C2 272 1)% 1E $C7$ $E) %%1
212 2(7**(E$ 1)*(7$*(2EC 2(72()E1 *2% 1%$* E)%* $2* - - - $$C -
Source3 ;ieldwor6( 21)

,A0'E23 Bodeling ".0( ;""( =D0 and ".5 using least s:uare regression met2od
Bodel /nstandardi7ed
0oefficients
5 Sig. 1
1
S:uare ; D= + Std. Error
1 !0onstant# %.C11E7 2.)E$E 2.)2% .C) .C*7
a
1.*11 1).2C

1.*1
1
=D0 1C)2*.$ E$E.E *.E1 .$
;"" -1%E)$.% )*)7.% -E.EE .)*
".0 -1%*E).% EC*%.* -E.C)E .2C
a. "redictors3 !0onstant#( ".0( ;""( =D0
b. Dependent 'ariable3 ".5
Source3 S"SS 1esult
Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-17 !"aper# ISSN 2222-2$%% !&nline#
'ol.%( No.1)( 21)

72

,able (! 4ne5Sample Statistics

N Bean
Std.
Deviation
Std. Error
Bean t X Df
Sig.
!2-tailed#
Bean
Difference
'.11 27 ).7) .$2$*2 .1%C)7 2%.%)$ %) 2* . ).7)7
S"SS 1esult( 21)

,A0'E *! Descriptive Statistics on Conse)uences of Noncompliance ith $nternational standard of Accounting Reporting
6-ypothesis (7
Yuestions 0ompanies
Bean
Std.
Deviation N
1.Fow do ,ou see t2at t2e failure to account for relevant
environmental and social responsibilit, activities could result in t2e
imposition of sanctions on t2e organi7ation b, regulators or legal
proceedings against t2e organi7ation b, t2ird partiesW
N.S0&B E.1* .7C17C %
Dangote 2.*71 1.177$ C7
Fone,well 1.*$)2 .711$ %7
5otal 2.%1)7 1.)E2C 2)

2.Non-disclosure of relevant environmental accounting related
information limits organisations professional reputation.

N.S0&B
2.*$ 1.%$E %
Dangote E.)12) .%C77 C7
Fone,well E.)211 .)C$12 %7
5otal E.2E%E .777)7 2)

E."artial or non-disclosure of social responsibilit, accounting could
lead to failure to 6eep mar6et s2areK product bo,cott

N.S0&B
2.2) 1.17E$ %
Dangote E.$2% 1.7*C) C7
Fone,well E.%$$ .%)E7 %7
5otal 2.CC%1 1.$)C 2)
Fieldor89 %&"*
,A0'E +! Multivariate ,ests
c

Effect
'alue ; F,pot2esis df Error df Sig.
"artial Eta
S:uared
Intercept =il6sJ >ambda .2) 2*%2.2%
a
E. 1CC. . .C7*
0ompanies =il6sJ >ambda .** 1$.$CE
a
*. EC$. . .222
a. E9act statistic
S.SS result9 %&"*

.opulation t5 test calculation
t N X V 9 N %) V ).7
D KZn .$2$KZ 27 N 11#:&+
The IISTE is a pioneer in the Open-Access hosting service and academic event
management. The aim of the firm is Accelerating Global Knowledge Sharing.

More information about the firm can be found on the homepage:
http://www.iiste.org

CALL FOR JOURNAL PAPERS
There are more than 30 peer-reviewed academic journals hosted under the hosting
platform.
Prospective authors of journals can find the submission instruction on the
following page: http://www.iiste.org/journals/ All the journals articles are available
online to the readers all over the world without financial, legal, or technical barriers
other than those inseparable from gaining access to the internet itself. Paper version
of the journals is also available upon request of readers and authors.

MORE RESOURCES
Book publication information: http://www.iiste.org/book/

IISTE Knowledge Sharing Partners
EBSCO, Index Copernicus, Ulrich's Periodicals Directory, JournalTOCS, PKP Open
Archives Harvester, Bielefeld Academic Search Engine, Elektronische
Zeitschriftenbibliothek EZB, Open J-Gate, OCLC WorldCat, Universe Digtial
Library , NewJour, Google Scholar


Business, Economics, Finance and Management Journals PAPER SUBMISSION EMAIL
European Journal of Business and Management EJBM@iiste.org
Research Journal of Finance and Accounting RJFA@iiste.org
Journal of Economics and Sustainable Development JESD@iiste.org
Information and Knowledge Management IKM@iiste.org
Journal of Developing Country Studies DCS@iiste.org
Industrial Engineering Letters IEL@iiste.org
Physical Sciences, Mathematics and Chemistry Journals PAPER SUBMISSION EMAIL
Journal of Natural Sciences Research JNSR@iiste.org
Journal of Chemistry and Materials Research CMR@iiste.org
Journal of Mathematical Theory and Modeling MTM@iiste.org
Advances in Physics Theories and Applications APTA@iiste.org
Chemical and Process Engineering Research CPER@iiste.org
Engineering, Technology and Systems Journals PAPER SUBMISSION EMAIL
Computer Engineering and Intelligent Systems CEIS@iiste.org
Innovative Systems Design and Engineering ISDE@iiste.org
Journal of Energy Technologies and Policy JETP@iiste.org
Information and Knowledge Management IKM@iiste.org
Journal of Control Theory and Informatics CTI@iiste.org
Journal of Information Engineering and Applications JIEA@iiste.org
Industrial Engineering Letters IEL@iiste.org
Journal of Network and Complex Systems NCS@iiste.org
Environment, Civil, Materials Sciences Journals PAPER SUBMISSION EMAIL
Journal of Environment and Earth Science JEES@iiste.org
Journal of Civil and Environmental Research CER@iiste.org
Journal of Natural Sciences Research JNSR@iiste.org
Life Science, Food and Medical Sciences PAPER SUBMISSION EMAIL
Advances in Life Science and Technology ALST@iiste.org
Journal of Natural Sciences Research JNSR@iiste.org
Journal of Biology, Agriculture and Healthcare JBAH@iiste.org
Journal of Food Science and Quality Management FSQM@iiste.org
Journal of Chemistry and Materials Research CMR@iiste.org
Education, and other Social Sciences PAPER SUBMISSION EMAIL
Journal of Education and Practice JEP@iiste.org
Journal of Law, Policy and Globalization JLPG@iiste.org
Journal of New Media and Mass Communication NMMC@iiste.org
Journal of Energy Technologies and Policy JETP@iiste.org
Historical Research Letter HRL@iiste.org
Public Policy and Administration Research PPAR@iiste.org
International Affairs and Global Strategy IAGS@iiste.org
Research on Humanities and Social Sciences RHSS@iiste.org
Journal of Developing Country Studies DCS@iiste.org
Journal of Arts and Design Studies ADS@iiste.org