11.isea vol 0004www.iiste.org call for paper no 1 pp. 74-87
Issues in Social and Environmental AccountingVol. 4, No. 1 June 2010Pp 74-86Manager’s Perception of the Importance of En- vironmental Accounting and its Effect on theQuality of Corporate Environmental Account- ing Disclosures: Case from Indonesia Lindrianasari R. Weddie Adriyanto Accounting Department Faculty of Economics Lampung University - IndonesiaAbstractThe purpose of this study is to compare perceptions of managers in Indonesia concerning envi-ronmental accounting disclosure with actual environmental accounting disclosure. The value ofthis research is making an original contribution to develop instrument in exploring managerialperception of environmental accounting disclosure. Samples for this study are corporate mana-gerial from listing companies in the Jakarta Stock Exchange and also annual report companies.This research has developed strategies to measure managerial perceptions of environmentalaccounting disclosure. Mail surveys design used on this study. Analysis used for testing rela-tionship between managerial perception and environmental accounting disclosure is simpleregression test. The dependent sample variable data is the latest data published in Jakarta StockExchange. This study finds a positive correlation between managerial perception of environ-mental accounting disclosure and actual environmental accounting disclosure. This resultshows that disclosure quality and several legal sanctions in environmental aspects could beempowerment of regulator pasties to force managers to maintain their pollution and reportedtheir activity also in their annual report. In hence, legitimacy theory is used as an explanationfor corporate reactions to threats to its legitimacy vis-á-vis the social contract, while legitimacytheory infers motivation to incorporate environmental accounting disclosureKeywords: Managerial Perceptions, Environmental Accounting Disclosure, Legitimacy The-oryLindrianasari is currently a teaching staff at Accounting Program Faculty of Economics, University of Lampung, Indo-nesia, email@example.com. R. Weddie Adriyanto is currently a teaching staff at the same institution, email:firstname.lastname@example.org. This paper has been discussed in several seminars; National Seminar on Higher Education inFebruary 2007, at the International Seminar on Writing the Ministry of National Education Republic of Indonesia, andat the International Industrial Relations Association (IIRA) at Sanur Beach, Bali – Indonesia 2010. Special thanks toA / Prof Greg Shailer from the Australian National University as a supervisor during the preparation of proposal of thisstudy.
Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 75I. Introduction in environmental accounting express accounting disclosure quality environ-Currently, almost countries are faced ment in which they express the com-environmental problems. This condition panys financial statements. As well asrequires the existence of a legitimacy this study will test the power of legiti-that ensure the implementation of the macy theory in relation to perceptions ofarrangement a good social environment, managers in addressing environmentalespecially with regard to the impact of problems. Sementar objectives of thiscorporate activity. In a previous study study was to confirm whether the per-showed that most of the managers con- ception of managers on the importancecerned and stated that the protection of of environmental accounting impact onenvironmental quality is important to be the quality of the actual environmentalsufficient, but on the other hand, evalu- accounting disclosures in the financialating the quality of environmental dis- statements of companies in Indonesia.closures in annual financial statements Another goal to find in this study was to(annual report) show that the relation- obtain empirical evidence whether theship was not significant. There are dif- conservation of living has become partferences between the perceptions of of the companys management strategy.managers with real environmental dis- We assume that when managers per-closures (Jaggi and Zhao, 1996). In- ceive that environmental accounting iscreased demand for environmental infor- something that is important to be consid-mation is not matched by the enthusiasm ered, then the companys regulation andof the presenters report (in this case a also actions to be taken will lead tocompany) to provide environmental in- green action.formation in their financial reports pub-lis. This asymmetry may be triggered by Compelling reason that can explain whythe fear of the managers of firms that this research must be done is because toenvironmental information will increase note how far the perceptions and desiresthe companys obligation to control pol- of managers, acting as the motor of thelution as a consequence of company ac- company, to control the environment.tivity, and that this action eventually will Furthermore, this research will also see,trigger cost increasing (Jaggi and Zhao, if the perception is reflected in the per-1996). formance of environmental accounting disclosures in annual financial state-In a number of reasons, voluntary dis- ments. The benefit to achieve from thisclosure (voluntary disclosure) to the ac- study is to provide empirical evidence tocounting environment is required as ad- the regulators in addressing the factorsditional information (compulsory report- that encourage companies to make dis-ing) to provide accounting information closures of environmental information.to a wider audience and depth. This pol- If it is necessary to form an environmenticy is expected to control the adverse in accounting regulation, the regulatorseffects on the environment arising from in the fields of accounting can immedi-corporate activities. the issues raised in ately prepare a new draft standard sothis study is whether there is a relation- that it can synergize with the law and theship between the perception of managers laws that already exist.
76 Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86II. Theoretical Framework and 2.1.1. Relation between Perception Building Hypothesis and Quality of DisclosureLegitimacy Theory is “A condition or a The increasing needs and public aware-status which exists when an entity’s ness of environmental control, severalvalue system is congruent with the value studies analyzing the results using thesystem of the large social system of theory of legitimacy (Mobus, 2005;which the entity is a part. When a dis- Campbell, et al., 2003; Deegan, 2002;parity, actual or potential, exists between ODonovan. 2002; Suchman, 1995; OD-the two value systems, there is a threat wyer, 2002; Jaggi and Zhao, 1996;to the entity’s legitimacy (Lindblom, Milne, 2002) generates results that1994, p.2) through the legitimacy, compliance with accounting firms to provide environ- “Legitimacy is a generalized per- mental information in annual financial ception or assumption that the reports has increased. Mobus (2005) actions of an entity are desirable, found that there is a negative correlation proper, or appropriate within between legal sanctions concerning some socially constructed system mandatory environmental disclosure of norms values, beliefs, and defi- rules with the deviations made by the nitions”. (Suchman, 1995, p.574). company. That is, the stronger the appli- cable legal sanctions in a country, theSeveral studies using legitimacy theory less deviation with regulations stipulatedcan explain the quality of corporate en- by the regulators. This clearly showsvironmental accounting disclosures. that the actual legitimacy is needed toAmong of them are Hogner (1982), minimize damage in a general context.Guthrie and Parker (1989), Patten (1991, Studies conducted by ODwyer (2002)1992, 1995), Gray, Kouhy and Lavers expand and clarify the use of legitimacy(1995), Deegan and Rankin (1996), theory as motivation in the social ac-Deegan and Gordon (1996), Walden and counting disclosures by presenting a nar-Schwartz ( 1997), Brown and Deegan rative concept of legitimacy. Several(1998), Neu, Warsame and Pedwell studies have also shown that the real(1998), Burn (1998), Cormier and legitimacy comes from the pressure ofGordon (2001), Wilmshurst and Frost societal (public), in this case is non-(2000), Deegan, Rankin and Tobin managerial stakeholders, and thus the(2002), ODonovan (1999, 2002), OD- company subsequently tried to conver-wyer (2002) and most recently the re- gence with public perception as a re-search by Mobus (2005). Most of these sponse to public pressure (ODonovan,studies reported that the quality of envi- 1999; Bansal and Roth, 2000).ronmental accounting disclosure andsocial disclosure have a strong correla- Furthermore, legitimacy theory is alsotion to legitimacy. These empirical stud- used to describe the reaction of the pres-ies shows that most environmental ac- sure facing firms in dealing with the le-counting disclosures and social disclo- gitimacy of the social contract, while itsures are related to the attention of so- also emerged the concept of legitimacycial accounting in the context of legiti- as a motivational theory of social disclo-macy. sure (Deegan, 2002; ODwyer, 2003).
Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 77Thus be seen that social disclosures will the public. If the company does notbe issued by the management company show the pattern of cooperation and inwill actually highly colored by the social public view it is contrary to the agree-contract, which is none other than the ment, even detrimental to the public,basic foundation of legitimacy. As de- then people can just pull the right com-scribed by Gray et al. (1988), Patten, pany to continue its business. Although(1992, 1991), Woodward et al. (1996) most studies show that strong environ-and Deegan (2002), legitimacy theory is mental accounting disclosures relating tobased on the concept of social contract the theory of legitimacy, but there arebetween society and in society at large. also several studies that successfullyHow the company will continue to stand rejected the results. The study states thatif the public believes that the company is the managers refuse to report their envi-consistent with the existing social con- ronmental accounting area because, de-tract. spite the heightened environmental prob- lems but they sure would gradually sub-Lindblom (1994) offers a theoretical side. Meanwhile, if in their annual finan-structure in a theoretical view toward cial statements disclose environmentalaccounting studies that uses the frame- problems so that stakeholders attach awork to think of legitimacy theory, to negative perception of their companyexplain voluntary social disclosures is- forever, and it will affect their positionssued by the company manejer. Lindblom as managers (O’Dwyer, 2002).explained that legitimacy theory can bethought appropriate framework in ex- The result of study has suggestion that inplaining why managers make voluntary fact what the manager is reported in thedisclosures. Although this disclosure annual report will be strongly influencedrules should not be done, but to meet the by the perception managers. If managerslegitimacy of the public, then the man- have a perception that environmentalager is doing a voluntary disclosure. To factors are important information to beview the pattern of rule that forced reported, then the quality of corporate(mandatory), Suchman (1995) strongly environmental accounting disclosuressupports the explanation that the disclo- would be good too. Conversely, if man-sure of environmental Lindblom manda- agers do not have the perception thattory environmental disclosure in corpo- environmental information is importantrate legitimacy, the legitimacy of an in- information, the disclosure of corporatetegrated and expanded itself. The expla- environmental accounting will also be anation is more or less because of the le- disclosure that is less quality. This state-gitimacy, of the needs arising in society, ment was reinforced by the results ofenabling the regulator to draw up a legal research Halkos et.al. (2002) who found,instrument that ultimately become some- there are four of the most influential fac-thing that should be done by the com- tor in the implementation of environ-pany. Conclusions can be drawn from mental management systems, namelythe entire explanation above that the the- firm size, legislations, environmentalory of legitimacy requires companies to liabilities, and the perception. And le-show their responsibility not only to gitimacy is a factor taken into accountowners of capital, but also and more im- factors in influencing these perceptions.portant is to fulfillment of the right of From these arguments we construct the
78 Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86hypothesis that there is a positive and better at getting better profitability. Thissignificant relationship between the per- study fully supports Pava and Krauszceptions of managers in Indonesia about (1996), who explained that the informa-the importance of environmental ac- tion disclosed by the company will notcounting disclosures by the quality of make the company lose the stakeholders.accounting disclosure of the actual envi- There should also be understood that theronment in the financial statements of company that shows its social responsi-companies in Indonesia. bility, proved to have better environ- mental performance than companies that2.2. Relationship of Economic Per- do not show social responsibility. Al-formance with Quality of Disclosure Tuwaijri et al. (2003) claimed that good environmental performance must be sup-Previous researchs in the field of envi- ported by good economic performance.ronmental accounting disclosures are In other words, good economic perform-trying to examine the relationship be- ance would be associated with good en-tween environmental disclosures by eco- vironmental performance as well. Thenomic performance. However, these finding of Al-Tuwaijri et al. is in linefindings still produce diverse conclu- with the findings of previous researcherssions in explaining the relationship be- (Porter and Lindes (1995), which sup-tween environmental disclosures by en- ports the view that most investors arecouraging the economic performance of seeing that good environmental perform-increasingly widespread research in this ance as an intangible asset related com-field. Testing the relationship between panies.environmental disclosures by six ac-counting ratios to measure economicperformance has been done Freedman III. Research Methodand Jaggi (1982). They found statistical 3.1. Data and Collection Proceduresresult is not strong enough to reject thenull-hypothesis, which means they do To obtain the primary data managernot see any significant relationship be- form of perception, we do spread thetween economic performances with en- questionnaire by post and email. Thevironmental disclosure. Research con- questionnaire contains 17 items that con-ducted Lindrianasari (2008) also in line sisted of 13 derived from previous re-with research Freedman and Jaggi search conducted by Jaggi and Zhao(1982) who failed to accept the alterna- (1996) and added a fourth questiontive hypothesis on the relationship be- about the legitimacy of the use Deegantween the quality of disclosures with (2002). Of the 17 items of questions in-economic performances. deed lead to the theory of legitimacy,Richardson et al. (2001) observing cor- especially items Deegan questions aris-porate social disclosure and focus only ing from the particular to the test of le-on environmental disclosure. Richardson gitimacy theory. All the companiesreported that there was a positive signifi- listed on the Jakarta Stock Exchange iscant effect on the level of environmental our sample of this research. Secondarydisclosure in an overall cost of capital. data, such as the quality of corporateRichardson further argues that the actual environmental accounting disclosures,disclosures that the company will do we get by doing literature study on the
Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 79companys annual report on the Capital cant relationship between age and exportMarket Reference Center at the Indone- of environmental performance. Richard-sian Stock Exchange. Annual reports of son et al. (2001) reported that there wascompanies used in this study is the year a positive significant effect on the level2005 (because this study we did in 2006) of environmental disclosure in an overalland reporting to funders conducted in cost of capital. While Al-Tuwaijri et al.2007. (2003) using the margin by doing ap- proach, which compares with net income3.2. Measurement Variables of net sales in research. Cormier et.al3 2.1. Independent Variables (2005) using five variables that represent the information used by investors as5 Likert scale attached to the whole much respect for corporate environ-question to test the perception of manag- mental management, i.e. risk, capitalers on the importance of environmental markets, volumes, concentrate owner-accounting information. Score one for ship and foreign ownership. This studythe perception strongly disagree to the will include four variables of economicvalue of five (5) for the perception could performance control variables, namelynot agree more. Answers to the ques- age, export, margins, and the cost of thetionnaire were obtained from the first capital.level of validity and reliability. Reliabil-ity test results of the questionnaire ob- Age. Of a lawsuit against the social con-tained Cronbachs Alpha value of 83.8% tract to the company at the time of stand-which indicates that this questionnaire ing in the middle of a community, incontains questions that can be believed turn stimulate the legitimacy, making aclarity. 83.8% very good value which strong reason to suspect that the oldmeans that each respondent understood company, then the corresponding is thethe question posed, therefore has a ten- companys activities with their socialdency not contradictory answers. While environment. Because, if the companythe value derived from product moment does not have a contribution to the envi-bivariate correlations to measure the va- ronment (in the broad sense), then thelidity questionnaires used an average of company can’t operate properly and last-0.05 at the level and some even reach ing. Information age we get from thethe 0.01 level. This is evidence that there company prospectus and grouped intoare questions of the questionnaire of this three.study have high value ofvalidity. a) The value of one to represent com- panies that have listings ≤ 10 yearsFurthermore, for additional analysis as b) The value 2 to represent a companywell as control variables, this research that has been listing 10 to 20 yearswill also use the economic information c) The value of 3 to represent a com-relating to the quality of disclosure of pany that has listings of more thanenvironmental accounting. Control vari- 20 yearsables used in the study is the variablethat has been used in previous studies. Export. The existence of the export banKaiser and Schulze (2003) are using age, for products from companies that do notexport, and legal ownership of their perform the conservation of the environ-studies and found positive and signifi- ment, makes a compelling reason why
80 Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86the export of variables included in the (Lang and Lundholm 1993). Thus, therecompanys economic performance vari- is allegedly a positive relationship be-ables. The bigger the company expected tween environmental risk disclosure.to export an environment of accountingdisclosure quality is also better because 3.2.2. Dependent variables .of environmental conservation activities Quality of disclosures were classifiedare carried out is also good. into five level (equivalent to 5 Likert’ scale).Margin. This research was conducted 5th scale = good quality (to environ-using margin approach al-Tuwaijri et al. mental disclosure + includ-(2003), which compares with net income ing value of money and/orof net sales, we assume that the greater to acquire ISO 14001 and itsthe ratio the better the margin of corpo- equivalent added by futurerate environmental accounting disclo- planningsures, or in other words there is a posi- 4th scale =good quality (to environ-tive relationship between margin with mental disclosure + includ-environmental disclosure. ing value of money and/or to acquire ISO 14001 and itsCompany size. Several previous studies equivalent) rdhave consistently shown that there is a 3 scale = good enough quality (to suffi-positive relationship between environ- cient environmental disclo-mental disclosures by firm size (Scott, sure)1994; Neu et al., 1998; Cormier and 2nd scale = disclosure available is notMagnan, 1999). In this study, companies very sufficient enoughthat used for the same size as that used 1st scale = the environmental accountingCormier (2005), ie ln-assets (natural disclosure do not have qual-logarithm). The objective of this study is ity (in order to limited andto get the natural logarithm of the rela- even no environmental dis-tive data to normal, because we know closure)the asset value of each company is verylarge variance, so that surely will create 3.3. Analysis Toolsabnormalities. The analysis used to assess the relation-Risk. Cormier et al (2005) explains that ship between manager perceptions of thevolatility is measured by using the beta importance of disclosure of environ-of the company. Attention to environ- mental accounting with the accountingmental accounting management which is disclosure quality environment in Indo-currently increasingly becomes an im- nesia is a multiple regression.portant key to environmental informa-tion disclosure by companies to help Y(QualDis) = α + β1X1(Perceive) + β2X2investors and creditors understand the (Age) + β3X3 (Export) + β4X4 (Margin) +risks of their investments. High risk thatthe company will reduce information β5X5 (Assets) + β6X6 (Risk) + εicosts of investors if companies provideadditional disclosure of the environment
Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 81 Figure 1. Research ModelIV. RESULTS AND DISCUSSION which return the questionnaire to be more secure. Because we have to harmo-From the total questionnaires sent, there nize between the perception of corporatewere 283, a total of 52 questionnaires managers with the quality of disclosuresreceived back, or as much as 15%. After made in corporate environments, thepassing the assessment, only 39 ques- questionnaire which was sent we givetionnaires are eligible to as samples. the code a part that is not visible. This isThis is because four of returned ques- just an attempt to become the basis oftionnaires did not answer the question- making conclusions that do not deviatenaire thoroughly, six questionnaires from these research issues.came from similar companies and threequestionnaires lateness (passed the pe- 4.1. Assumptions of the Classical Testriod of analysis). This indeed is a com-mon condition that occurs in research Normality. Jarque Berra test results ob-that uses mail surveys because of the tained probability value 0.89. This valueweakness of researchers in the control of is greater than the value of α (0.05),respondents. However, in using the mail which means there is no problem of nor-survey, we have been attempting to in- mality in the data used in this study. Re-terfere to make contact by telephone to sidual data is normal, so that the dataseveral companies, to conduct a confir- used in normal distribution.mation directly to the manager or direc- 1) Linearity. In the Ramsey RESETtor of finance of the questionnaires that test tests obtained probabilitywe send. Randomly, 15 company fi- value 0.44. This value indicatesnance directors successfully contacted that the linearity assumption isby telephone, generally we do resend fulfilled, because the probabilitydirectly addressed to the name of the of linearity> 0.05.director who wanted to go. And this 2) Auto-correlation. Autocorrelationbusiness is enough yield positive results, test is used on Breusch-Godfrey
82 Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 test the LM Serial Correlation closure of environmental accounting in Test, the result of probability of Indonesia affected by the perception of 0.91. This result is larger than α the manager of the company. Statistical (0.05), and showed that there were significance value of 0.033 level (<0.5) no problems of autocorrelation in can be concluded that there was indeed a the model. significant relationship between the per-3) Homoscedasticity. On the test is a ception of managers in Indonesia about test used homoscedasticity White the importance of disclosure of environ- Heteroscedasticity, obtained prob- mental accounting on the quality of the ability value 0.01 which is smaller actual environmental accounting disclo- than the value of α (0.05), so that sures in the financial statements of com- we can conclude that there are panies in Indonesia. With these results problems heteroscedasticity. In- mean we can accept the hypothesis pro- consistent data. posed in this study.4) Multicollinearity. Multicollinear- ity test R2 value shows the value The results of this study do not support of -0.91 which is smaller than the previous research conducted in China model R2 value of 0.22. This which found no positive relationship value indicates that there is no between perceptions of the actual report, problem in the data and also mul- manager of environmental accounting ticollinearity between variables. items in the annual report of company (Jaggi and Zhao, 1996). However, thisFrom the whole classical assumption, we research managed to support many ofcan conclude that our secondary data is a the previous studies which state that thegood and can do further testing, al- theory of legitimacy is very dominant inthough there are problems homoscedas- explaining corporate environmental dis-ticity. closures. These are studies performed by Hogner (1982), Guthrie and Parker4.2. Hypothesis Testing. (1989), Patten (1991, 1992, 1995), Gray, Kouhy and Lavers (1995), Deegan andThe hypothesis of this study says there is Rankin (1996), Deegan and Gordona positive and significant relationship (1996), Walden and Schwartz (1997),between the perception of managers in Brown and Deegan (1998), Neu, War-Indonesia about the importance of dis- same and Pedwell (1998), Burn (1998,closure of environmental accounting Cormier and Gordon (2001), Savage,with the quality of the actual environ- Rowlands and Cataldo (1999),mental accounting disclosures in the fi- Wilmshurst and Frost (2000), Deegan,nancial statements of companies in Indo- Rankin and Tobin (2002), ODonovannesia. From the statistical results ob- (1999, 2002), ODwyer (2002) andtained positive significant value to the Mobus (2005). This result is also sup-relationship between the perceptions of port previous study conducted by Lindri-managers of companies in Indonesia anasari (2007) who found that compa-with the quality of their companys dis- nies with good environmental perform-semination of environmental accounting ance (showed by ISO 14001) will pre-items. With the level of 38% positive sent good environmental information incorrelation shows that the quality of dis- corporate annual reports. It shows that
Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 83companies tend to give information quality accounting disclosures showedwhich will have a positive impact on the that the overall economic performancecompany. variables do not have a significant rela- tionship to the quality of environmentalTests for control variables (economic accounting disclosures.performances) of the company with Table 1 . Statistical Test Result of Control VariablesVariables Age Export Margin Assets RiskSign. 0.387 0.784 0.665 0.801 0.545Overall results of testing indicate that building social systems, values andthe perception variables proved to have a norms, and beliefs that exist in society,significant relationship to the quality of has encouraged the companies to dis-environmental accounting disclosures. close environmental information. ThisAnd more interestingly, that the legiti- statement is strengthened by the resultsmacy appear to play an important role of testing the economic performanceon the pattern of Indonesias top manag- variables that do not have a significanters view the importance of disclosure of relationship to the quality of environ-environmental accounting. The results of mental accounting disclosures.this study both confirm the results ofprevious studies conducted Lindrianasari 5.2. Research Implications(2008) that shows the economic per-formance variables have no significance 1. If the facts prove the decreasing de-on the quality of disclosure of environ- viations with regulations stipulatedmental accounting. This is also in line by the regulators, this clearly showswith previous research conducted Freed- that the actual legitimacy is needed toman and Jaggi (1982), but does not sup- minimize damage in the overall con-port research Richardson et al. (2001). text. Not be separated in the context of environmental accounting that ulti- mately affect the quality of the envi-V. Conclusion and Recommendation ronment. If the rules had been im-5.1. Conclusions posed on all large companies in Indo- nesia to provide a reserve fund forFrom the results and discussion in the environmental conservation, then atprevious chapter can be concluded that the end of the environment surround-the study is successfully received the ing the company will be better. Andmain of hypothesis proposed. The con- it will be reflected in company dis-tent of the annual report prepared by closures.corporate managers is deeply influenced 2. It is time for regulators to consider theby perceptions of the manager. Positive items that should be reported as re-and significant relationships are shown lated to environmental conservation.in the statistical tests in this study. Le- The consistence of monitoring andgitimacy theory which states that the enforcement of the rules of the gov-activities of an entity corresponds to ernment, it will give full support to
84 Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 achieve the environmental quality of Accounting Review, Vol. 27, No. life better. Furthermore, it is not only 2 pp. 87-108. a slogan and opinions about “save _________, W.Y. Hill & C.B. Roberts environmental”, but further more It (1995b) "Environmental, Em- can become a necessity that can be ployee and Ethical Reporting in enjoyed by all in the society. Europe", ACCA Research Re- port, Vol. 41.5.3. Research Limitations Barthelot, S., Denis Cormier, Michel Magnan (2003) "EnvironmentalThere is no perfect study. Likewise with Disclosure Research: Review andthis study, there are some weaknesses Synthesis", Journal of Accountingand is expected to be corrected in future Literature, Vol. 22, pp. 1-44.studies. In determining the quality of Buhr, N. (1998) “Environmental per-disclosure, we feel very thick and some- formance. Legislation and annualtimes justification subjectivity factor is report disclosure: the case of acidaffected by corporate activity, which rain and Falcolnbridge”, Account-significantly has been done in the life of ing, Auditing & Accountabilitysociety. However, we have tried to keep Journal, Vol. 11, No. 2, pp. 163-promoting objectivity in assessing the 190.quality of accounting disclosure in a Campbell, D., Barrie Craven and Philiprelatively narrow time period, to be the Shrives (2003) "Voluntary Socialconsistency of assessment. Control vari- Reporting in Three FTSE Sectors:ables used in this study is still very lim- A Comment on Perception andited. There are still other variables that Legitimacy", Accounting, Audit-can be used as the control variable as it ing & Accountability Journal,has been shown from the results of pre- Vol. 16, No. 4, pp. 558-581.vious research. Subsequent research may Cormier, D. & Gordon, I. (2001) “Anconsider the use of other economic per- examination of social and envi-formance variables such as cost of capi- ronmental reporting strategies.”tal, leverage, and the legal ownership, Accounting, Auditing & Account-are the results of some previous research ability Journal, Vol. 14, No. 5,showing a significant relationship on the pp. 587-616.disclosure of environmental accounting. ________, Michel Magnan, Barbara Van Velthoven (2005) "Environmental Disclosure Quality in Large Ger-References man Companies: Economic Incen- tives, Public Pressure or Institu-Adams, C. A. (2002) "Internal Organiza- tional Conditions?" European Ac- tional factors Influencing Corpo- counting Review, Vol. 14, No. 1, rate Social and Ethical Report- pp. 3. ing", Accounting, Auditing & Ac- Deegan, C. (2002) "The Legitimising countability Journal, Vol. 15, No. Effect of Social and Environ- 2, pp. 223-250. mental Disclosure - A Theoritical_________, A., A Coutts, and Harte Foundation" Accounting, Auditing (1995a) "Corporate Equal Oppor- & Accountability Journal, Vol. tunities (non) Disclosure", British 15, No. 3, pp. 282-311.
Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 85Deegan, C. A., M. Rankin (1996) "Do 333-346. Australian Companies Report En- Lindblom, C. K. (1994). The Implica- vironmental News Objectively? tions of Organizational Legiti- An Analysis of Environmental macy for Corporate Social Per- Disclosure by Firms Prosecuted formance and Disclosure. Critical Successfully the Environmental Perspectives on Accounting Con- Protection Authority", Account- ference, New York. ing, Auditing & Accountability Lindrianasari, 2007. Hubungan antara Journal, Vol. 9, No. 2, pp. 50-67. Kinerja Lingkungan dan Kuali-__________, ________ (1997) "The tas Pengungkapan Lingkungan Materiality of Environmental In- dengan Kinerja Ekonomi Peru- formation to Users of Annual Re- sahaan di Indonesia, Jurnal ports", Accounting, Auditing & Akuntansi & Auditing Indonesia Accountability Journal, Vol. 10, Vol. 11, No. 2, pp. 159-172. No. 4, pp. 562-583. __________, 2008. Hubungan Hubun-Deegan, C. &. B. Gordon. (1996) "A gan antara Kinerja Lingkungan, Study of Environmental Disclo- Pengungkapan Lingkungan dan sure Practices of Australian Cor- Kinerja Ekonomi Perusahaan di porations" Accounting and busi- Indonesia, Jurnal Akuntansi dan ness Research, Vol. 26, No. 3, pp. Bisnis, Vol. 8, No. 1, pp. 25-32. 187-199. Milne, M. J. (2002) "Securing Organiza-________, Rankin, M., & Tobin, J. tional Legitimacy: An Experimen- (2003) “An examination of the tal Decision Case Examining The corporate social and environ- Impact of Environmental Disclo- mental disclosure of BHP from sure", Accounting, Auditing & 1983-1997: a test of legitimacy Accountability Journal, Vol. 15, theory”, Accounting, Auditing & No. 3, pp. 372-405. Accountability Journal, Vol. 15, Mobus, J. L. (2005) "Mandatory Envi- No. 3, pp. 312-343. ronmental Disclosure in Legiti-Guthrie, J.E. & Parker, L.D. (1989). macy Theory Context." Account- “Corporate social reporting: a re- ing, Auditing & Accountability buttal of legitimacy theory”, Ac- Journal, Vol. 18, No. 1, pp. 492- counting and Business Research, 517. Vol. 9, No. 76, pp. 343-352. New, D., Warsame, H. & Pedwell, K.Hogner, R.H. (1982) “Corporate social (1998) “Managing public impres- reporting; eight decades of devel- sions: environmental disclosures opment at US Steel.” Research In in annual reports”, Accounting, Corporate Performance and Pol- Organizations and Society, Vol. icy, Vol. 4, pp. 243-250. 23, No. 3, pp. 265-288.Jaggi R & Zhao, B. (1996) ODonovan, G. (1999) "Managing Le- "Environmental Performance gitimacy Though Increased Cor- and Reporting: Perceptions of porate Environmental Reporting: Managers and Accounting Pro- An Exploratory Study", Interdis- fessionals in Hong Kong", The ciplinary Environmental Review, International Journal of Ac- Vol. 1, No. 1, pp. 63-99. counting, Vol. 31, No. 3, pp. ___________ (2002) "Environmental
86 Lindrianasari, R.W. Adriyanto / Issues in Social and Environmental Accounting 1 (2010) 74-86 “Disclosure in the Annual Report: "Constructing a Research Data- Extending the Capability and Pre- base of Social and Environmental dictive Power on Legitimacy The- Reporting by UK Companies: A ory", Accounting, Auditing & Ac- Methodological Note", Account- countability Journal, Vol. 15, No. ing, Auditing & Accountability 3, pp. 344-371. Journal, Vol. 8, No. 2, pp. 78-ODwyer, B. (2003) "Managerial Per- 101. ception of Corporate Social Dis- Schwartz, W. D. W. a. B. N. (1997). closure: An Irish Story", Account- "Environmental Disclosure and ing, Auditing & Accountability Public policy Presure." Journal of Journal, Vol. 15, No. 3, pp. 406- Accounting and Public Policy, 436. Vol. 16, pp. 125-154.__________, Jeffrey Unerman, John Suchman, M. C. (1995) "Managing Le- Bradley (2005) "Perceptions on gitimacy: Strategic and Institu- the Emergence and Future Devel- tional Approaches" Academy of opment of Corporate Social Dis- Management Review, Vol. 20, No. closure in Ireland." Accounting, 3, pp. 571-610. Auditing & Accountability Jour- Walden, W.D .& Schwartz, B.N. (1997) nal , Vol. 18, No. 1, pp. 14-43. “Environmental disclosure andPatten, D. (1995) "Variability in Social public policy pressure”, Journal Disclosure: A Legitimacy-Based of Accounting and Public Policy, Analysis." Advances in Public Vol. 16, pp. 125-154. Interest Accounting, Vol. 6, pp. Wilmshurst, T. D., Geoffrey R. Frost 273-285. (2000) "Corporate EnvironmentalPatten, D.M. (1991) “Exposure, Legiti- Reporting A Test of Legitimacy macy and Social Disclosure.” Theory", Accounting, Auditing & Journal of Accounting and Public Accountability Journal, Vol. 13, Policy, Vol. 10, pp. 297-308. No. 1, pp. 10.__________ (1992) “Intra-Industry En- Woodward, D., Pam Edwards & Frank vironmental Disclosure in Re- Birkin (2001) "Some Evidence on sponse to the Alaskan Oil Spill: A Executives Views of Corporate Note on Legitimacy Theory.” Ac- Social Responsibility", British counting, Organizations and Soci- Accounting Review, Vol. 33, pp. ety, Vol. 17, No. 5, pp. 471-475. 357-397.R.H. Gray, R. K., & S. Lavers (1995a).
Issues In Social and EnvironmentalAccounting Associate Editors: Hussain, Mostaq M., University of New Burnswick, Canada Komsiyah, University of Trisakti, Indonesia(Issues in SEA) Editors Advisors: Fuglister, Jayne, Cleveland State University, USA Gray, Rob, St. Andrews University, Scotland UK Na’im Ainun, Gadjah Mada University, IndonesiaISSN : 1978-0591 Syakhroza, Akhmad, University of Indonesia, IndonesiaHasan Fauzi, Sebelas Maret University, Indonesia Members of Boards: 1. Adams, Carol, La Trobe University, Australia 2. Al-Khadash Husam Aldeen, Hashemite University, Al-Khadash, Jordania 3. Aras, Guler Yıldız Technical University, Turkey Guler, CALL FOR PAPERS (8th ISSUE) 4. Ball, Amanda University of Canterbury, New Zealand 5. Berman Shawn, University of New Mexico, USA Berman, 6. Brown Judy, Victoria University of Wellington, New Brown,Issues in SEA is an international journal as networking and dis- Zealandsemination means of practices and theory of social and environ- 7. Brown, Alistair, Curtin University of Technology, Australia Brownmental accounting. Since Problems of social and environmental 8. Campbell David, New Castle University, UK Campbell,in general and in accounting context in specific have been global 9. Choi Jong-Seo, Pusan National University, Korea Choi, Jong- 10. Crowther David. De Montfort University, United King- Crowther,issue, it is necessary for us to share and cooperate to make bet- domter the corporate financial, social and environmental perform- 11. Donleavy, Gabriel D., University of Macau, Chinaance. Issues in SEA publishes rigorous, original and innovative 12. Freeman, Edward University of Virginia, USA Edward,scholarly papers dealing with theoretical, empirical, applied, 13. Georgakopoulos, Georgios University of Amsterdam, Georgios,surveys, and case studies providing meaningful insights into the The Netherlandssubject areas. 14. Ghazali, Imam University of Diponegoro, Indonesia Imam, 15. Guthrie, James The University of Sydney, Australia James, 16. Husted, Bryan ITESM/Instituto de Impresa, Mexico Bryan, 17. Ibrahim, Daing N University of Sains Malaysia, Malaysia N.,Subject Coverage 18. Idris, Kamis Universiti Utara malaysia Kamis,Topics include but are not limited to: 19. Jasch Christine Maria, The Institute for Environmental Jasch, Environmental accounting Management and Economics, Austria Social accounting 20. Kent, Pamela Bond University, Australia Kent 21. Kokubu, Katsuhiko Kobe University, Japan Katsuhiko, Ethical issues in accounting and financial reporting 22. Lawrence, Stewart University of Waikato, New Zealand Stewart, Corporate governance and accountability 23. Mahoney, Lois, Eastern Michigan University, USA Accounting for the Costs and Benefits of CSR-related Activities 24. Murray Alan, Sheffield University, UK Murray, Accounting and Disclosure of Environmental Liabilities 25. Maunders, Keith, University of the South Pacific, Fiji Corporate Environmental Strategy 26. Magness ,Vanessa Ryerson University, Toronto Canada Vanessa Corporate Social Performance 27. Nik Ahmad Nik Nazli, International Islamic University Ahmad, Malaysia, Malaysia Corporate social responsibility and management control 28. O’Donovan Garry, University of Tasmania, Australia O’Donovan, Corporate social responsiveness 29. Orlitzky Marc, University of Redlands, USA Orlitzky, Triple bottom line performance 30. Palliam, Ralph American University of Kuwait Ralph, 31. Parker, Lee University of South Australia Lee, 32. Pondeville, Sophie Marquet Université University of Marquet, Namur, BelgiumSpecific Notes for Authors 33. Rahman, Azhar A Universiti Utara Malaysia, Malaysia A.,Submitted papers must not have been previously published nor 34. Roberts, Robin, University of Central Florida, USA Robertsbe currently under consideration for publication elsewhere. All 35. Rasheed, Abdul A., University of Texas at Arlingtonpapers are refereed through a double blind process. Issues in 36. Schaltegger, Stefan University of Lueneburg Stefan, GermanySEA is published biannually in June and December, so each con- 37. Sen Swagata, University of Calcutta, India Sen,tributor is encouraged to submit the papers before 30 May and 38. Savage, Deborah EMA Research & Information Center Deborah,30 November. See information for contributors and submission (EMARIC), USA 39. Suharjanto Djoko, Sebelas Maret University, Indonesia Suharjanto,guidelines to submit your paper. The contributors are required to 40. Stapleton, Pamela, University of Manchester UKsubmit their paper electronically, using Microsoft word, to this 41. Svensson, Goran, Oslo School of Management, Norwayaddress: email@example.com or firstname.lastname@example.org 42. Elijido-Ten Evangeline Swinburne University of Technol- Elijido-Ten, Evangeline, ogy, Australia 43. Belal, Ataur, Ashton University, UKContact: +62271827003 fax +62271827003 44. Freedman, Martin Towson University, USA Martin, 45. Chen, Jennifer C Brigham Young University, Hawai, USA C.,Web Address: http://isea.icseard.uns.ac.id and 46. Cho, Charles H Concordia University, Canada H.,http://web.ebscohost.com 47. Patten, Den, Illonois State University, USA Den 48. Larrinaga-González, Carlos Burgos University, Spain Larrinaga- Carlos, 49. Laine, Matias, University of Tampere, FinlandPublication of Indonesian Centre for Social and Environ- 50. Tarta, Monica The Academy of Economic Studies, Monica,mental Accounting Research and Development (ICSEARD) Bucharest, Romaniaand EBSCO Publishing 51. Tilt, Carol A., Flinders University, South Australia 52. Koleva, Petia University of Nantes, France Petia, 53. Yusoff, Haslinda UiTM, Malaysia Haslinda,Faculty of Economics 54. Zein, Mustaffa M UiTM, Malaysia M.,Sebelas Maret University, 55. Selvam, V VIT University, India V.,Jl. Ir Sutami 36 A 56. Jardat, Rémi ISTEC, Paris, France Rémi,Solo 57126 57. Caliyurt, Kiymet Tunca Trakya University, Turkey Tunca,Indonesia 58. Momin, Mahmood Ahmed Auckland University of Ahmed, Technology, NZ
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