How to resolve audit matters in European Affairs? Introduction to a sustainable management accounting under IAS 37

Abstract

Concerns regarding the development of environmental accounting have been around for decades. This work is an update to some of the previous questions around the development of ecological accounting to see how this has changed over the last two decades. Specific findings from the paper analysis include ecological management accounting, “cost of decommissioning” (IAS 37) requires a fundamental change to organization management, different values exploring relationships such as corporate governance, inclusive of the living and physical world, with a longer time horizon, and a centrality of external factors. Environmental accounting is a more commonly used synonym for ecological accounting, though this term is distinct and does not cover many of the ecological challenges. In terms of corporate governance, the board of directors (BoDs) is the main responsible structure in meeting and safeguarding both shareholders and stakeholders’ interests. Integrated reporting’s primary aim is to improve information quality provided to shareholders while responding to stakeholders’ interests and needs. Using lenses of stakeholder theory, this study explores the relationship between board of directors’ characteristics as size, gender diversity, Return on Decommissioning Asset, outside directors, number of executive committee  and, using a self-constructed Performance Disclosure Index. Applying a content analysis method, data were collected from integrated reports to determine the self-constructed disclosure index. Through quantitative analysis, we analyzed which BoDs’ characteristics are correlated to disclosure index. The analyzed sample was formed of 100 integrated reports produced by 27 European members states, published on the website for the period 2016–2020. The current study contributes to existing knowledge by exploring the voluntary adoption of integrated reporting using quantitative analysis and focusing on the European context. The obtained results highlight that integrated report alignment levels is directly correlated with the proportion of outside directors on the board and Return on Decommissioning Asset.