Conventional approaches of cost accounting have become inadequate because they have
ignored important environmental costs and activities impacting consequences on the environment. Corporate neglect and avoidance of environmental costing have left gap of
financial incompleteness and absence of fair view of financial information reporting to users of
financial statements, environmental regulatory agencies and the general public. The research
instruments utilized in the study were primary data survey and secondary data elucidation. For
this purpose, cross-sectional and longitudinal content analyses were carried out. The test
statistics applied in this study were the t-test statistics, Pearson Product-Moment correlation
tests, ANOVA, and Multivariate Linear Regression Analysis. The study investigated best
practice of environmental accounting among companies currently operating in Nigeria.
Specifically, the study assessed the level of independence of tracking of costs impacting on the
environment; level of efficiency and appropriateness of environmental costs and disclosure
reporting. Findings are that environmental operating expenditures are not charged
independently of other expenditures. There is also, absence of costing system for tracking of
externality costs. Environmental accounting disclosure does not however, take the same pattern
among listed companies in Nigeria. Considering the current limited exposure of many
organizations to environmental accounting methodology, this study proffers an insight into
new bases and design for environmental accounting. Recommendations among others are that
corporate organizations should develop Plans and Operating Guidelines expected to meet
Industry Operating Standards which should focus on minimizing impact on environment.
There should be continued evaluation of new technologies to reduce environmental impacts.
Standard cost accounting definitions should be agreed for environmental spending, expenditure
and management accounting in the Oil & Gas and manufacturing sectors operating in Nigeria.
Both the Nigerian Securities and Exchange Commission (SEC) and accounting practice in
Nigeria should consider the urgency of placing demand for mandatory environment disclosure
requirement on corporate organizations which impact degradation on the environment.

TITLE PAGE ii
DECLARATION iii
CERTIFICATION iv
DEDICATION v
ACKNOWLEDGEMENT vi
PREFACE viii
ABSTRACT   ix
LIST OF TABLES xiv

CHAPTER ONE
INTRODUCTION
11 Background to the Study 1
12 Statement of the Problem 4
13 Research Questions 7
14 Objectives of the Study 8
15 Research Hypotheses 8
16 Significance of the Study 9
17 Scope of the Study 10
18 Research Limitations  10
19 Operational Definitions 12

CHAPTER TWO
LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK
20 Theory, Concepts and Models 15
21 Social Accounting 15
211 The Social Contract Concept 16
212 Legitimacy Theory as pertaining to social disclosure 17
213 Quality of Life Theory 18
214 Risk Society Theory 19
22 Environmental Accounting 21
221 Significance of Environmental Accounting 28
222 Land Degradation 30
223 Pollution  31
224 Levels of Environmental Accounting 32
225 Problems of Environmental Accounting 34
23 Legal Foundation on Environment and Accounting 36
231 The United Nations’ Protocols and agreements on environment 36
232 The Kyoto Protocol to the United Nations framework on Climate Change 37
233 Accounting Guidance on Kyoto Agreement by Governments 39
234 Environmental Accounting implication arising from the Kyoto Convention 40
235 EU Directive on Environmental Issues in Company Annual Reports
and Financial Statements   41
24 Models 42
241 Market valuation of environmental capital expenditure 42
242 Environmental Cost Primer Model 43
243 The Cost Benefit Model 50
244 Eco-efficiency Framework 54
2 45 Environmental Quality Cost Model (EQCM) 57
25 Environmental Audit 60
26 Environmental Accounting and Reporting 61
261 ECQM and Financial Reporting 61
262 Cost Estimation for Environmental Accounting 64
263 Externality Environmental Costs and Property Rights 65
264 Internalizing Externality Costs 66
265 Accounting Standards on environmental issues 68
266 Treatment of environmental capital expenditure 73
267 Environmental Accounting for Market Driven Competitiveness  74
268 Environmental Disclosure   75
269 Institutional and Policy framework in Nigeria   77
2610 Regulations, standards and codes on environment in Nigeria  79
2611 Policy Assessment   81
2612 Mandatory disclosure for corporate organizations in Nigeria 81
2613  Environmental Standards in Nigeria   82
27 Environmental Quality Reporting Model (EQR) and Research  Operationalization 83

CHAPTER THREE
RESEARCH METHODOLOGY
31 Research Design  85
32 Area of Study   85
33 Population and Sampling Procedure   86
34 Sampling Technique and Size  88
35 Environmental Quality Reporting/DisclosureModel Specification 90
36 EOQ Model 1   93
37 EOQ Model 2 94
38 Data Descriptions  96
39 Instrument Reliability and Validity 97
310 Estimation Technique / Rating Scale 99
311 Technique for Data Analyses   99

CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION
41 Sources of Data Collection 103
42 Factor Analysis of Primary Data 106
43 Secondary Data Analysis 107
44 Test of Hypothesis 4 (H0) 110
45 EQR Model 1 Regression Function and Test for Hypothesis 3 (H0) 115
46 Primary Data Analysis 117
47 EQR Model 2 118
48 Tests of Hypotheses 1 and 2 119
49 Responses to Questionnaire and interview with Environmental Policy Regulators   127
410 Environmental Performance Reports in some companies in Nigeria 129
411 Bases and Design of Environmental Cost Accounting 134
412 Environmental Financial Statements (EFS) Model 135
413 Reporting of Financial Statements to External Public and Accounting users142
414 The United States Superfund 142

CHAPTER FIVE
DISCUSSION OF FINDINGS, POLICY RECOMMENDATIONS AND
CONCLUSIONS
51 Overview of the Study Objectives 147
52 Discussions of Findings 148
53 Policy Recommendations 152
54 Conclusions 154
55 Contributions to knowledge 155
56 Areas of Future Research 156
References 157 - 170
Appendices     171 - 264


LIST OF TABLES
Table 21 Environmental Costs in Firms 46
Table 22  Decline in size of Marine Fishing in the Nigeria Niger Delta 55
Table 23 Decline in size in Tonnage / Trawler of Marine Fishing in the Nigeria Niger Delta 55
Table 24  Mangrove Conversion in Nigeria Niger Delta 56
Table 31 Stakeholder Companies in the Oil and Gas Sector in Nigeria 90
Table 32 Sample Companies by Year and Sector 101
Table 41a Environmental Quality Reporting Summaries in Secondary Data in the Sub-Sectors 105
Table 41b Summary of Data (Secondary and Primary) analyzed in Companies106
Table 42 Environmental Quality Reporting 109
Table 43 Test of Hypothesis 111
Table 44 Regression 114
Table 45 Environmental Quality Reporting through Primary Data 117
Table 46 T-Test Paired Sample Statistics 119
Table 47 Model Summaries of R-Squares 123
Table 48 Regression Statistics 124
Table 49 Environmental Financial Statement (EFS) Model 137
Table 410  Environmental Financial Statement (EFS) adjusted profit and loss
(highlighted) for three accounting years 139
Table 411  Pro-forma consolidated external environmental cost accounts
for A Company PLC 139
Table 412  Pro-forma external environmental cost accounts  141
Table 413 Costs of Environmental Measures  143
Table 414 Recommendations for Environmental Reporting from the UN CTC ISAR’S 9th Session in the Director’s Report 144
Table 415 UN ISAR Accounting Guidelines-Environmental
Financial Accounting Recognition of Environmental Costs 145
Table 416 Environmental Costs relating to current accounting period  146

FIGURES
Figure 21 The GEMI Environmental Cost Primer Model - Cost Boundaries 44