The use of environmental accounting concepts for companies encourages the ability to minimize the environmental problems it faces. Many large industrial and service companies are now implementing environmental accounting. The aim is to improve the efficiency of environmental management by evaluating environmental activities from the point of view of costs (environmental costs) and benefits or effects (economic benefits).Environmental accounting is applied by various companies to produce quantitative assessments of the costs and effects of environmental protection. Some reasons why companies need to consider adopting environmental accounting as part of a company's accounting system include: making it possible to reduce and eliminate environmental costs, improve the environmental performance of the company which may have a negative impact on human health and the success of the company's business, expected to generate more accurate costs or prices for products from desired environmental processes and enable fulfillment of the needs of customers who expect more friendly products / services in the environment. The purpose of environmental accounting as an environmental management tool and as a means of communication with the community is to increase the amount of relevant information made for those who need or can use it. In order to achieve success in the application of environmental accounting, the first and foremost thing that needs to be considered by company management is the compatibility between evaluations made by the company against the environmental impacts caused. The second step, determining what is the target of the company by identifying the main factors that have an impact on the company's environment and formulating a plan to reduce environmental impacts. The third step, choosing the appropriate measurement tool in determining environmental problems. The fourth step, conducting administrative assessments to set targets in each segment. The fifth step is to produce an accounting segment to measure each company division. The sixth step, conduct testing in each division. The final step is to review the performance. Performance reviews are expected to produce accounting segments that can support environmental management achievements in each division. Environmental Accounting(Environmental Accounting or EA) is a term that relates to the inclusion of environmental costs(environmental costs) into the accounting practices of companies or government agencies. Environmental costs are impacts that arise from both financial and non-financial aspects that must be borne as a result of activities that affect the quality of the environment. Environmental Management Accounting (Environmental Management Accounting) is one of the sub systems of Environmental Accounting which describes the problem of measuring the impacts of a company's business into a number of monetary units. Environmental Management Accounting can also be used as a benchmark in environmental performance The functions and roles of environmental accounting are divided into two forms. 1.Internal Function Internal function is a function related to the company's internal parties. The internal party is the party that runs the business, such as consumer households and other production and service households. As for the dominant actor and factor in this internal function is the leadership of the company. Because company leaders are people who are responsible for every decision making and determination of each company's internal policies. 2. External Functions External functions are functions related to financial reporting aspects. SFAC No. 1 explains that financial reporting provides information that is beneficial for investors and creditors, and other users in making investment, credit and similar decisions rationally. In this function, an important factor that needs to be considered by the company is the disclosure of the results of environmental conservation activities in the form of accounting data. Information disclosed to them results measured quantitatively from environmental conservation activities. This includes information about the economic resources of a company, claims against those sources (the obligation of a company to submit resources to other entities or capital owners), and the influence of transactions, events, and conditions that change economic resources and claims against the source. External functions give authority to companies to influence stakeholder decisions, such as customers, business partners, investors, local residents and administration. Therefore, companies must provide information about how company management is responsible for managing the owner for the use of economic resources entrusted to him. It is expected that the publication of environmental accounting results will function and mean for companies to fulfill their accountability and transparency for stakeholders which is very meaningful for certainty of evaluation of environmental conservation activities. There are several ways to disclose information on environmental responsibility, firstly presenting environmental information through "disclosure" can be done by making an overview of company activities related to efforts to preserve the environment, the results of independent parties' assessment of the entity's compliance with environmental sustainability, both reporting responsibility for the environment as well can be presented in core finance, for example equipment provided in order to reduce environmental pollution can be presented as a fixed asset.
EMA is very useful for the industry, among others:
(1)Ability to accurately research and regulate the use of materials, including pollution / residual volume, other types and so on. (2) The ability to identify, estimate, allocate, regulate or reduce costs, especially costs related to the environment. (3) More accurate and more comprehensive information in supporting the determination of and participation in voluntary programs, cost savings to improve environmental performance. Not even more polluting the environment. (4) Comprehensive information to measure and report on environmental performance, such as improving the company's image to stakeholders, customers, local communities, employees, government and financial providers. There are two approaches in formulating EMA namely (1) Monetary Accounting (based on monetary procedure) is an effort to identify, measure and allocate environmental costs based on the behavior of financial flows in these costs. (2) Physical Accounting (based on material flow balance procedure) is an approach to identify various behaviors of environmental cost sources. This will be useful for management to base the allocation of environmental costs that occur. Environmental accounting is one strategy for managing the environment by using environmental management tools that can be applied as environmental conservation efforts, environmental management accounting provides information on the use of natural resources and their impact on the environment and monetary information about costs used to improve the environment so that perceptions can community towards company image and influence the company's financial performance.
Environmental Accounting - An Important Part of An Information System in The Conditions When The Company Approach To The Environment Influences Its Prosperity