Green Accounting: Concepts and Practices

3181 Words Oct 15th, 2010 13 Pages
Green Accounting: Concepts and Practices

Research Paper

Responsibility towards environment has become one of the most crucial areas of social responsibility. With the concept of sustainable development catching on rapidly, corporate and industrial houses across the world are increasingly incorporating the environmental element in their day-to-day business operations. They are clear in their perception that along with quality, safety of the environment too, is an important factor in making a business successful. Concern has increased for environmental degradation, which is taking place mainly in the form of pollution of various types, viz. air, water, sound, soil erosion, deforestation, etc. It spoils human health, reduces economic
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In ISO 14001, environmental audit is defined as “the systematic, documented verification process of objectively obtaining and evaluating audit evidence to determine the reliability of an assertion with regards to environmental aspects of activities, events and conditions as to how they measure established criteria, and communicating such result to the client.” It helps an organization to identify issues before they become big problems affecting seriously the environment and the organization. It makes an objective evaluation of how well the organization has been managing its environment related activities.
1. Preparing the plan for environmental audit. 2. Preparing checklist for the area to be audited, based on procedures, objectives, and action plan. 3. Carrying out audit in the form of interviews and observation of the actual state of affairs. 4. Preparing audit report, and informing corrections. 5. Follow up to check corrective action is carried out or not. 6. Preparing joint report on the basis of all internal environment audits of the company. This report forms the basis for management review of the whole system.
Uses and Benefits associated with Green Accounting
Green Accounting is most useful for Investment Appraisal which affects both routine and strategic organizational decisions. Under Investment Appraisal, organizations are
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