Role of Financial Reporting on Carbon Emissions in Enhancing the Relevance of Accounting Information
DOI:
https://doi.org/10.33095/fv71p619Keywords:
Carbon Emissions, Financial Reporting, Relevance of Accounting Information, Materiality, Confirmatory value, Predictive value.Abstract
In an effort to enhance the applicability of accounting data for international oil corporations operating in Iraq, this study delves into the role of Financial Reporting on Carbon Emissions (FRCE). The researchers explore the overarching concept and significance of the Relevance of Accounting Information (RAI) in general, with a specific focus on its application to accounting information related to carbon emissions. The study also addresses the financial reporting of carbon emissions in industrial companies. Using two mathematical models, namely the Informational Content Model (ICM) and Autoregressive Integrated Moving Average (ARIMA), the researchers conduct an in-depth analysis of eleven years' worth of financial statements from Dana Gas, forming the basis of this study's sample. The analysis is performed using SPSS. Several conclusions have emerged from the study, with a pivotal finding being that ensuring the relevance of accounting information related to carbon emissions aligns with both user requirements for accounting information and the imperatives of environmental preservation. Moreover, the study underscores the impact of financial reporting on carbon emissions programs and greenhouse gas emissions on the relevance of accounting information, thereby influencing the overall quality of financial reporting. The study highlights that enhancing the suitability of information through financial reporting on carbon emissions contributes significantly to elevating the standard of financial reporting for the firm. As a recommendation, the researchers advocate for compliance with local laws or international treaties regulating carbon emissions, emphasizing the inclusion of accounting information and financial reports detailing expenses associated with carbon emissions in these compliance efforts.
Paper type Research paper
Downloads
References
References:
Al-Jarf, Y. (2017). “Accounting Disclosure under International Financial Reporting Standards and Its Impact on the Relevance of Accounting Information: An Applied Theoretical Study”, Journal of Accounting Thought, Vol. 21. No. 8. pp 1054-1107
Al-Sarraf, S., and Al-Taie, B. (2022), “The Impact of Governance Mechanisms on the Accounting Disclosure of the Sustainable Development of Iraqi Economic Units”, Journal of Economics and Administrative Sciences, Vol. 28 No. 132, pp. 233–251.
Badwy, H. (2019), “Value Relevance of Accounting Information: An Empirical Comparative Study on Egyptian and Saudi Listed Companies”, Alexandria Journal of Accounting Research, Vol. 3. No. 1. pp 347-405.
Benston, G., Carmichael, D., Demski, J., Dharan, B., Jamal, K., Laux, R., Rajgopal, S., and Vrana, G. (2007), “The FASB’s Conceptual Framework for Financial Reporting: A Critical Analysis”, Accounting Horizons, Vol. 21 No. 2, pp. 229-238.
Campbell, J., Cao, S., Chang, H., and Chiorean, R. (2020), “Derivatives Use and Its Consequences for Management Earnings Forecasts”, Working Paper, University of Georgia, Georgia State University, Singapore Management University and Lehigh University.
Dafroor, H., and Soly, A. (2023), The Impact of Accounting Policies on the Relevance Characteristic of Financial Statements: A Field Study of A Sample of Professionals in Economic Institutions in Touggourt during the Period (March - May 2023), M.Sc. in Financial and Accounting Science, Kasdi Merbah University - Ouargla, Algeria.
Ebaid, I. (2016), “International Accounting Standards and Accounting Quality in Code-law Countries: The Case of Egypt”, Journal of Financial Regulation and Compliance, Vol. 24. No. 1. pp 41–59.
Fadhal et al. (2021), “The Impact of Adopting Carbon Accounting on Financial Reporting Transparency: Evidence from the United Kingdom”, Economic Sciences, Vol. 16. No. 63. pp 67-89.
Haider, H., Hamdan, H., and Hamwi, A. (2022), “Studying Changes in Value Relevance of Accounting Information over Time (A Survey Study on Companies and Banks Listed on the Damascus Securities Exchange)”, Tishreen University Journal for Research and Scientific Studies, Vol. 44. No. 4. pp 463-478.
IASB. (2018). Conceptual Framework for Financial Reporting. London, UK: International Accounting Standards Board.
Jasim, R. and Al-Mashhdani, B. (2022), “Methods of Forecasting Credit Losses in A Sample of Iraqi Banks - A Comparative Analysis”, Journal of Economics and Administrative Sciences, Vol. 28 No. 132, pp. 174-195.
Jones, D., and Smith, K. (2011), “Comparing the Value Relevance, Predictive Value, and Persistence of Other Comprehensive Income and Special Items”, The Accounting Review, Vol. 86 No. 6, pp. 2047-2073.
Khatab, G., Khalel, M., Shokry, M., and Elywa, R. (2016), “A Proposed Framework of Environmental Disclosure about the Greenhouse Gas Emissions and Its Reflection on Financial Performance”, Journal of Environmental Science, Vol. 40. No. 1. pp 417-437.
Kieso, D., Weygandt, J., and Warfield, T. (2022). Intermediate Accounting, 18th Edition, Wiley.
Mohammed, E., and Abdullah, S. (2022), “The Quality of Audit Work Under Expert System”, Journal of Economics and Administrative Sciences, Vol. 28 No. 133, pp. 187–199.
Nayeri, D., Ghayoumi, F., Bidari, A. (2012), “Factor Affecting the Value Relevance of Accounting Information”, International Journal of Academic Research in Accounting, Finance and Management Sciences, Vol. 2 No. 2, pp. 86-95.
Ortas, E., Gallego-Álvarez, I., Alvarez, I., and Moneva, J. (2015), “Carbon Accounting: A Review of the Existing Models, Principles and Practical Applications”, In: Schaltegger S., Zvezdov D., Alvarez I., Csutora M., Günther E. (Eds.), Corporate Carbon and Climate Accounting. Springer, Cham.
Schaltegger, S., and Csutora, M. (2012), “Carbon Accounting for Sustainability and Management: Status Quo and Challenges”, Journal of Cleaner Production, Vol. 5 No. 36, pp. 1-16.
Sharaf El-Deen, H. (2018), “Carbon Pricing Mechanisms as A Tool for Managing the Cost of Emissions and Supporting Clean Production Processes”, Scientific Journal for the Colleges of Commerce Sector, Vol. 19. No. 1. pp 150-235.
Spiceland, D., Nelson, M., Thomas, W. (2022), Intermediate Accounting, 11th Edition, McGraw Hill.
Thabit, T., Shanshool, M., and Hussein, H. (2022), “The Risk of Climate Change and its Role in Carbon Accounting Development: Applications and Contemporary Issues”, Al-Kut University College Journal, Vol. 2022, pp. 207-215.
Yousif, N., and Mohamed, S. (2022), “The Role of Internal Audit in Assessing the Risks of Management Decisions regarding Strategic Operations (Acquisition)”, Journal of Economics and Administrative Sciences, Vol. 28 No. 133, pp. 172-186.
Zhang F., Hong F., and Xu W. (2018), “Impact of Carbon Prices on Corporate Value: The Case of China’s Thermal Listed Enterprises”, Journal of Sustainability, Vol. 10 No. 3, pp. 1-14.
Downloads
Published
Issue
Section
License
Copyright (c) 2024 Journal of Economics and Administrative Sciences
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Articles submitted to the journal should not have been published before in their current or substantially similar form, or be under consideration for publication with another journal. Please see JEAS originality guidelines for details. Use this in conjunction with the points below about references, before submission i.e. always attribute clearly using either indented text or quote marks as well as making use of the preferred Harvard style of formatting. Authors submitting articles for publication warrant that the work is not an infringement of any existing copyright and will indemnify the publisher against any breach of such warranty. For ease of dissemination and to ensure proper policing of use, papers and contributions become the legal copyright of the publisher unless otherwise agreed.
The editor may make use of Turnitin software for checking the originality of submissions received.
How to Cite
How to use the OJS system 
