Effect of Environmental Accounting on the Quality of Accounting Disclosures of Shipping Lines in Nigeria

Abstract

Accounting reports in shipping lines have been found deficient over time in the sense that they lack vital information to enable stakeholders make informed decisions. It is widely believed that lack of proper use of International Accounting Standards in affected countries of which Nigeria is a part hinders transparency in the financial statements of corporations. As a result of this, financial statements fail to provide useful information on a timely basis. This study establishes the effect of environmental accounting on the quality of accounting disclosure of shipping lines in Nigeria. The study was guided by the following research objectives; to establish the effect of identification of environmental cost on quality of accounting disclosure of shipping lines in Nigeria; to determine the effect of capitalization of environmental cost on quality of accounting disclosure of shipping lines in Nigeria; to establish the effect of identification of environmental liability on quality of accounting disclosure of shipping lines in Nigeria and to investigate the effect of measurement of environmental liability on quality of accounting disclosure on shipping lines in Nigeria. This study adopts both descriptive design and correlation analysis and the population of the study is the employees of the 101 registered shipping lines in Nigeria. The target population of this study was restricted to three departments which comprises of the legal department, finance and account department and technical and marine department of the shipping lines. The sample size for this study was 384 which were derived from Cochram’s model. Primary data was collected through administering of questionnaires to the staff of the shipping lines in Nigeria. Multiple regression models were used to establish the relationship between the dependent variable and the independent variables. The relationship among variables was tested using ANOVA, pearson correlation, multivariate regression and F-statistic. Data analysis was done using Statistical Package for Social Sciences (SPSS) generating both descriptive and inferential statistics including Pearson’s bivariate correlation. The findings of this study show that environmental accounting influences quality of disclosure on shipping lines in Nigeria. The study concludes that there exists a positive significant relationship between environmental accounting and quality of accounting disclosure on shipping lines in Nigeria. Based on the findings of this study, it is highly recommended that companies are to decide in their discretion which expenditure or cost should be included under the environmental expenses or cost. Environmental costs should be capitalized or expensed as the most controversial subjects for accountants as well as financial analyst. Companies should capitalize environmental cost if they are considered to be a cost of the expected future benefits from the assets regardless of whether there is any increase in economic benefits. Companies should recognize liability in the balance sheet when it is probable that an outflow of resources embodying economic benefits will result from the settlement of a present obligation.