Full Cost Accounting - A Course Module on Incorporating Environmental and Social Costs into Traditional Business Accounting Systems

by:  Noellette Conway-Schempf, Ph.D.

Accounting is the collection and aggregation of information for decision makers – including managers, investors, regulators, lenders, and the public. Accounting systems affect behavior and management and have affects across departments, organizations, and even countries. Information contained within an accounting system has the power to influence actions. Accounting information systems are particularly strong behavioral drivers within the context of a corporation - where profits and the bottom line are daily concerns. In order for environmental concerns to be important criteria in everyday business management decisions, they need to be encapsulated within the accounting systems of the organization.

In this educational module we will discuss efforts to include environmental and other social information into accounting systems. We provide an overview of the three main types of accounting systems used by developed nations and discuss their shortcomings in terms of environmental information content. Although we will discuss the three types of systems, we will focus the bulk of the discussion on managerial or cost accounting systems - the day to day accounting information systems used by decision makers in enterprises. Example overheads for lectures are included in Appendix I.

 

 Source link: http://www.ce.cmu.edu/GreenDesign/gd/education/FCA_Module_98.pdf