Financial reporting of environmental risks and liabilities

Abstract

Financial accounting and environmental issues are not strange bedfellows. A standard for financial statement reporting and disclosure of environmental risks and liabilities existed 30 years ago but this standard proved inadequate in the post-Sarbanes Oxley financial reporting environment. This paper, by discussing the evolution of accounting reporting standards related to environmental risks, seeks to provide a brief summary of the accounting profession's contribution to the business discussion of environmental issues. Accounting faculty may use this paper to discuss, not only the evolution of standards related to the financial reporting liabilities associated with environment risks, but also the limitations and shortcomings inherent in current reporting and disclosure standards. © Springer Science+Business Media, LLC 2009.