How Carbon Accounting Supports Corporate Decarbonization

Carbon accounting can be designed in the image of financial accounting, reporting balance sheets and income statements under the same accounting principles. The parallel carbon accounting conveys similar information to financial reporting, but with the unit of account in tons of CO2 rather than money. With similar properties, carbon accounting statements and financial accounting statements are mutually referential; “carbon statement analysis” mirrors financial statement analysis, providing the “double materiality” feature for sustainability reporting more generally. Double-entry bookkeeping revolutionized financial accountability centuries ago, and today, its principles are shaping a new frontier—carbon accounting. The articles in this issue on Perspectives on Carbon Accounting and Reporting were contributed by leading academic and practitioner experts on carbon accounting. The authors highlight key challenges, including responsibility for Scope 3 emissions, reliance on third-party estimates, the allocation of emissions to products, the importance of integrating carbon accounting with traditional financial and managerial accounting systems, and the need for commonly accepted carbon accounting standards. Double-entry bookkeeping revolutionized financial accountability centuries ago, and today, its principles are shaping a new frontier—carbon accounting. The articles in this issue on Perspectives on Carbon Accounting and Reporting were contributed by leading academic and practitioner experts on carbon accounting. The authors highlight key challenges, including responsibility for Scope 3 emissions, reliance on third-party estimates, the allocation of emissions to products, the importance of integrating carbon accounting with traditional financial and managerial accounting systems, and the need for commonly accepted carbon accounting standards.

This work reviews current practices in corporate carbon accounting and highlights opportunities for future research. The common framework for determining and reporting corporate greenhouse gas (GHG) emissions today is the GHG Protocol. Like financial accounting standards, this framework includes overarching objectives, principles for conceptual guidance, and procedures for determining key outcome variables. Their design and implementation, however, often result in disclosures that obscure firms’ actual emissions and decarbonization progress. Recognizing the growing demand for transparency, standard-setters worldwide have recently introduced regulations for carbon accounting and reporting. These regulations require companies to disclose decision-useful information on their emissions. Yet, they have also largely adopted the GHG Protocol for how companies should determine and report their emissions. Accounting scholars now have the opportunity to develop solutions that will make corporate carbon accounting an effective tool in combating climate change. Double-entry bookkeeping revolutionized financial accountability centuries ago, and today, its principles are shaping a new frontier—carbon accounting. The articles in this issue on Perspectives on Carbon Accounting and Reporting were contributed by leading academic and practitioner experts on carbon accounting. The authors highlight key challenges, including responsibility for Scope 3 emissions, reliance on third-party estimates, the allocation of emissions to products, the importance of integrating carbon accounting with traditional financial and managerial accounting systems, and the need for commonly accepted carbon accounting standards. Double-entry bookkeeping revolutionized financial accountability centuries ago, and today, its principles are shaping a new frontier—carbon accounting. The articles in this issue on Perspectives on Carbon Accounting and Reporting were contributed by leading academic and practitioner experts on carbon accounting. The authors highlight key challenges, including responsibility for Scope 3 emissions, reliance on third-party estimates, the allocation of emissions to products, the importance of integrating carbon accounting with traditional financial and managerial accounting systems, and the need for commonly accepted carbon accounting standards.

This study aims to verify the integration level between the financial and management accounting systems as a result of the convergence process with the international accounting standards and of the effectiveness of controllership in Brazilian companies. A descriptive research was undertaken, based on the application of the questionnaire by Angelkort and Weißenberger (2011) to the 500 Best and Biggest of Revista Exame, issue 2011, using a sample of 32 companies that answered the research. The correlations between the integration level of the financial and management accounting systems and the variables “consistency of financial language”, “quality of services provided” and “degree of influence in decision making”, during the convergence period with the international accounting standards, were positive and moderate. It was also observed that the period before the accounting convergence (2004 till 2007) showed a better integration level of the financial and management accounting systems than the accounting convergence period (2008 till 2011). In conclusion, the accounting convergence process increased the integration level of the financial and management accounting systems in the investigated companies, as well as the effectiveness of controllership, particularly in the consistency of the financial language, in the quality of the services provided and in the influence of the controllers’ services on these companies’ decisions.

This study focused upon the role, function and scope of the financial management systems operating in the small business sector of the economy. The research sought to understand why in certain firms robust financial systems exist whereas in others they are seen to be weak. To this end the role of the accounting profession as it effects financial management systems was investigated. The study produced some interesting results. Bookkeeping systems adopted for financial accounting scored positively which may well be linked to the high preponderance of integrated computer systems adopted by firms. Management accounting systems did not score as well as financial accounting overall. Whilst smaller businesses were most likely to be dissatisfied with their management accounting systems, long established firms were as likely to be dissatisfied with their financial and management accounting systems than more recently established entities.

MAY 2012 PLACEMENT ADS

Carbon Financial Accounting System highlights the importance of carbon finance and carbon accounting in China's efforts towards sustainable development and reducing its carbon footprint. The article discusses the need to manage and trade carbon assets, develop a comprehensive carbon financing system, and account for and report carbon activities. It proposes constructing a carbon accounting framework that includes all key sources of carbon emissions and carbon sequestration capacity. The article emphasizes the need to integrate carbon accounting into a company's operations and establish a comprehensive carbon finance ecosystem as a critical component of national strategic development. To achieve this, the Chinese government must promote CDM initiatives and relevant policies, enhance support to intermediary institutions, centralize the management of CDM projects, and strengthen carbon financing regulations. The article suggests establishing carbon trading and pricing mechanisms and improving the carbon trading system to create an effective carbon finance regulatory structure. Additionally, a carbon accounting system is required for financial and accounting oversight to support green and low-carbon growth, hence strengthening carbon accounting and reporting regulations of companies. The incorporation of carbon exchange, carbon funds, and carbon sinks banks are also essential in enhancing the financial accounting system.

Big data generation in power companies is particularly prominent in financial accounting, which is particularly prominent in financial accounting. According to the traditional financial accounting process and system, it is impossible to accurately analyze large amounts of financial data. In the era of big data and cloud computing, it provides very convenient conditions for the Engineer of financial processing processes of power companies. Through cloud computing technology, the characteristics of power big data are analyzed, and the decision-making process of traditional financial system is reconstructed, which highlights the application of big data and cloud computing in smart grid. Taking the operation and maintenance cost analysis of actual substation as an example, the use of big data ideas for objective analysis enables China’s power companies to seize this period and quickly complete the financial system process Engineer to adapt to the development of the times.

German accounting has traditionally followed a dual ledger approach with strictly separated internal cost accounting, as the basis for management information, and external financial accounting focusing on creditor protection and based on the commercial law. However, the increased adoption of integrated accounting systems implies a significant change in the relationship between financial and management accounting systems. We use Hegelian dialectic to trace the historical development of German accounting from separated systems and antithetical propositions of full integration, to the emergence of partial integration as the synthesis of this transformation process. The foundation of our paper is a comprehensive analysis of the literature on the relationship between financial and management accounting in Germany. On this basis, we elaborate how financial accounting in Germany has been shaped by its economic context and legislation, and how financial accounting – accompanied by institutional pressures – in turn influenced management accounting. We argue that the changing relationship between management and financial accounting in the German context illustrates how current accounting practice is shaped not only by its environment, but also by its historical path. Based on this reasoning, we discuss several avenues for future research.

Governmental initiatives: the UNIDO (United Nations Industrial Development Organization) TEST approach

The importance of computerised accounting system (CAS) is indisputable for private as well as public sector. One of the continuous efforts in the public sector can be seen through the introduction of Government Financial and Management Accounting System or GFMAS by Accountant’s General (AG) Department in year 2005. GFMAS has been expected to enhance operational efficiency and effectiveness to enable the department to deliver value-added service. As far as the researchers are concerned, no attempt has been made to examine End-User Computing Satisfaction (EUCS) towards GFMAS especially in AG Department. Thus, the purpose of this study is to determine the level of satisfaction among the end users of GFMAS at AG Department specifically in East Malaysia (Labuan and Sabah branches). By distributing questionnaires to 140 AG staffs that using GFMAS, descriptive analysis throughout EUCS factors (content, accuracy, ease of use, format, timeliness, system reliability, system speed) have been drawn successfully. Probably, the result will be able to assist The Accountant General’s (AG) Department to improve every aspect in The Government Financial and Management Accounting System (GFMAS).

This article examines the interaction and role of financial and managerial accounting in supporting enterprises' foreign economic activity (FEA) under martial law conditions. FEA presents unique challenges for accounting, such as complex operations, currency risks, customs regulations, and the need to comply with international standards. These conditions require integrating financial and managerial accounting to ensure operational resilience and effective management in a volatile global economic environment. The study aims to analyze the specific features and interdependence of financial and managerial accounting in FEA. It focuses on their role in enhancing decision-making and optimizing performance during martial law, addressing risks and regulatory challenges. The research is based on a theoretical and practical analysis of financial and managerial accounting systems. The study applies comparative and analytical methods to assess their compliance with international standards and practical implementation in the FEA context under martial law. Financial accounting ensures transparency and compliance by producing financial statements (balance sheet, income statement, cash flow statement) for external stakeholders. Managerial accounting focuses on internal decision-making, providing tools for cost analysis, budgeting, and risk management. Integrated accounting systems allow enterprises to align compliance with strategic goals, enabling real-time decision-making and resource optimization in foreign markets despite wartime challenges. The study concludes that integrating financial and managerial accounting is crucial for managing FEA during martial law. Financial accounting provides transparency and compliance, while managerial accounting offers insights for adaptation and strategic management. Enterprises are encouraged to adopt unified digital platforms to streamline processes, improve data accuracy, enhance decision-making, and ensure greater efficiency in the context of complex external factors, thus ensuring greater resilience and competitiveness in the global market.

Business logic is the link in an information system between a user interface and a database. Typically it contains formal rules, translated into computer programs, that control how data will be processed to achieve the objectives of the information system. This paper describes a classroom exercise to help students understand this segment of an information system. In addition, it is useful for helping students understand the relation between traditional financial accounting and accounting systems. They are required to describe formally and precisely how FIFO and LIFO inventory values can be derived in an automated system.

Lean management is a philosophy that seeks the continuous improvement and meeting customer demands, through the elimination of any and all types of wastes. Initially rooted in Toyota corporation’s production system, lean management has rapidly spread to various manufacturing and non-manufacturing sectors. Yet, even with such spread of lean management implementation, our understanding of the developments in organisations’ management accounting system (MAS) in the context of lean is still ambiguous. The available literature either from the academic or the consultancy domain problematises the traditional accounting system to work with lean management and suggest either shedding traditional accounting practices at all or using ‘lean accounting’ as a ‘lean-tailored’ accounting system. However, neither the academic nor the consultancy literature succeed in developing an overall theoretical conceptualisation of how an organisation’s MAS works with lean. Nor do they provide an in-depth investigation of the role played by the main lean accounting practice; Value Stream Costing (VSC) and the factors affecting its acceptance or rejection. Additionally, management accounting literature has not contributed much to our academic knowledge on the MAS associated with lean management as a form of horizontal organisation and process innovation. Hence, this research aims at developing a theoretical conceptualisation of the developments in organisations’ management accounting system (MAS) in the context of lean management. Additionally, the research seeks to investigate the performative role of the lean accounting VSC practice and explore the factors affecting managers’ willingness to accept or reject its implementation.A longitudinal case study informed by the use Actor Network Theory (ANT) and Michel Callon’s (2007, 2010) performativity thesis, is conducted on one of the factories of a multinational manufacturing organisation, adopting a lean management system. ANT’s elements of the ‘sociology of translation’ (Callon, 1986; Latour, 1986; Latour, 2005) are used first to develop a literature driven conceptualisation of the current discourse in both consultancy and academic literatures on the MAS associated with lean. Empirically, various human and non-human actors are identified at both the organisation’s local and global levels. Callon’s (1986) and Latour’s (1986, 1996) four moments of translation are used to interpret actors’ interactions making up the developments in organisation’s MAS. Callon’s (1998a) concepts of framing and overflow and performativity thesis (Callon, 2007, 2010) are then used to develop an empirical driven theoretical conceptualisation of the developments in organisation’s MAS in the context of lean. The research tested the performativity of VSC by tracing its effects on product cost and analysed if, or to what extent, the organisation is willing to implement it. The research contributes to both academics and practitioners through providing new nuances on the operation and developments in organisation’s MAS and practices in the context of lean. It also, responds to calls from both management accounting and lean management literatures to the develop more context related management accounting research and provide in depth empirical analysis on the management accounting practices relevant to lean management. The use of ANT unpacked new insights on the social and technical aspects of the developments in an organisation’s MAS in the context of lean. Such aspects include; the influential role of management accountants and consultants in lean organisations, the performative role of operating structures in lean settings and the association between the performativity of accounting calculations and management accounting relational ontology. The literature driven theoretical conceptualisation shows that, more research is needed on actors’ interactions forming the fabrics of organisations’ MAS and how its calculations interact with other actors in a process innovation such as lean. In terms of VSC, the practice performed in an opposite direction to the predictions made for it. In the case study conducted, VSC was mobilised by the factory layout and intentions of the organisation actors; both locally and globally, which may have distorted the expectations from its implementation. Additionally, it was found that committing to a lean accounting tool as VSC can be difficult in the context of headquarters’ pressures and political unrest. Successful VSC implementation, requires organisations to review their needs for product unit costs along with, the construction pattern of their value streams. It is suggested that more case study research is required at the intersection between both MAS and lean management research areas, to help expand academics’ and practitioners’ understanding of the operation and development in the MAS’s of companies implementing a lean management system. Additionally, it would be helpful to provide more empirical evidence on the conditions needed for VSC implementation and continue to explore the role played by other management accounting or lean accounting practices in lean organisations. This strand of literature is still evolving and lacks codification.

The necessity of developing information add-ins to the financial accounting system for the formation of additional strategic information is revealed. Additional types of information needed by stakeholders to make strategic decisions are highlighted. Historical aspects of the emergence of strategic accounting engineering are considered. The main ways of developing engineering principles for building a strategic financial accounting system are highlighted and analyzed. The sequence of formation of derivative strategic balance sheets is developed through the development of an engineering system of financial accounting of an enterprise, which includes the following stages: 1) aggregation of elements of financial statements; 2) implementation of corrective operations; 3) implementation of transformational (hedged) operations; 4) implementation of strategic operations; 5) implementation of hypothetical operations. The necessary sources of information for forming a derivative strategic balance sheet of an enterprise are disclosed. A model for generating a derivative strategic balance sheet of an enterprise has been developed, which allows calculating engineering indicators (net assets, net assets after adjustments, hedged net assets, strategic net assets, net liabilities) for analyzing the results of strategic enterprise management.

The importance of computerised accounting system (CAS) is indisputable for private as well as public sector. One of the continuous efforts in the public sector can be seen through the introduction of Government Financial and Management Accounting System or GFMAS by Accountant General (AG) Department in year 2005. GFMAS is expected to enhance operational efficiency and effectiveness to enable the department to deliver value-added services. As far as researchers are concerned, no attempt has been made to examine End-User Computing Satisfaction (EUCS) towards GFMAS especially in AG Department. Thus, the purpose of this study is to determine the level of satisfaction among the end users of GFMAS at AG Department specifically in East Malaysia (Labuan and Sabah branches). Besides, this study also examines the effect of seven factors (content, accuracy, ease of use, format, timeliness, reliability of the system, speed of the system, etc) on the level of satisfaction among end users towards GFMAS. By distributing questionnaires to 140AG staffs that using GFMASand conducting in-depth interview with few directors and officers, empirical analyses have been drawn successfully. In general, end user satisfaction on GFMAS correlates significantly with content, accuracy, format, ease of use, timeliness, speed of the system and reliability of the system.