The Role of Cost Accounting in Environmental Cost Measurement and Control in a Small Enterprise – A Case Study

Arleta SZADZIEWSKA and Grzegorz BUCIOR

Abstract:

Enterprises are viewed as the main generators of the ecological threats. For this reason, while conducting a business activity, companies cannot afford to ignore the environmental protection rules. This necessitates access to relevant and credible information (Szadziewska, 2013) that would allow:

  • assessment and control of the impact of economic activity on the natural environment,
  • functioning in accordance with the applicable environmental regulations,
  • rational management of the natural capital resources,
  • reducing the risk of ecological catastrophes,
  • implementation of new technological solutions and innovations into production processes and reduction of the negative impact on the natural environment.

An important role in delivering the above–mentioned environmental information is played by the cost account recorded by businesses. As part of the information system, it should constitute an important tool in obtaining relevant and credible information, enabling economic entities to undertake activities aimed at prevention, reduction and repair of the damage done to the natural environment. In highly developed countries, the use of CA as a source of environmental information has been the subject of many scientific studies since the end of the 20th century (Wendisch, Heupel, 2005). In Poland, so far, little research in this area has been conducted (Stępień, 2005; Szadziewska, 2013). What is more, most of the projects implemented concerned the methods used for measurement of the environmental impact large enterprises exert as well as inclusion of such information in external reporting. By contrast, the studies conducted so far overlook or present little information on the role of CA as a measurement system and a source of information on the environmental costs (EC) in micro and small enterprises. Due to the significant number of these entities, however, in most market economies, their economic activity contributes to the environmental burden caused by pollutants. For this reason, these entities should have access to information on their impact on the natural environment, including information on the resulting EC. Lack of access to this type of data prevents compliance with the applicable environmental regulations. Taking this into account, the aim of the article is to present the use of the CA system as a tool for measuring EC in the small manufacturing enterprise under examination. We believe our article extends the knowledge on the possibilities of using CA to obtain reliable information on EC in small businesses. The case study presented also allows identification of the actions that can be taken by every small entity to record, group and control the costs of natural resource exploitation and pollution removal as well as the cost of the protective measures undertaken.