QUESTION 6

Environmental management is considered to be one of the most important issues facing companies today. Thus, with legal and practical recognition it would seem environmental issues are integral to business strategy. Environmental Management Accounting will not only support a company's sustainability efforts but may also improve the organisation's financial performance. With a view to promoting environmental management, many companies are working to introduce an environmental accounting, adopting its techniques and taking environmental conservation initiatives For example at Environmental Accounting at Tosiba company is aimed at collecting accurate data on investments and analyzing the collected data in order to reflect investment effects and cost benefits in managerial decision making.

Required:

a. Explain TWO ways in which Environmental Management Accounting can lead to improved financial performance considering the cost company has to spend on collecting the environmental data for managerial decision making. (Not more than 120 words)

(6 marks)

b. Do issues such as the environment help management accountants to become more strategically important members of an organisation? ( Not more than 100 words)

(4 marks)

[TOTAL MARKS 10]