Environmental Accounting Practices and Environmental Capacity for Sustainable Economy

Abstract

Environmental accounting in the last few decades has become a global necessity and received wide recognition. The Accounting reporting system is also challenged by various regulatory environment and globalization perspectives under multiplicity of social, legal, political and cultural values. Accordingly, companies need to strive to aim for both economic and societal goals. Within this purview this study was set out to investigate the relationship that exists between environmental accounting practices and environmental capacity for a sustainable economy. Ex-post facto research design was adopted for this study. The population was total manufacturing industry with sample size of 5 selected purposively. The results show a significant and positive relationship between the two variables of study. The study found that economic sustainability and degree of economic disclosures had significant and positive effect on performance (Adj R² ₌ 0.097, F- Stat = 2.56887, p < 0.05. The study concluded that economic sustainability as well as degree of economic disclosures has a significant effect on the performance of the sampled firms that thereby improving their sustainability and going concern status. The study recommended that the Federal Ministry of Environment and other regulatory agencies in Nigeria have a responsibility to develop guidelines that will allow for environmental accounting and corporate social responsibility to be incorporated in corporations' report and see to it that these guidelines are strictly adhered to.