Abstract

This chapter provides insight into the challenges that environmental issues raise for financial accounting, focusing narrowly on the financial statements and associated notes to the accounts. The concern in this context is the extent to which financial statements mis-represented “reality” because they fail to reflect the impact of organisations on the natural environment and vice versa. At the same time, financial accounting principles and standard setting processes have not helped account preparers to develop robust measurement and disclosure practices in this area. Why this might be the case and information about attempts that have been made to bring “accounting” and “environment” closer together are proposed in the chapter.