a descriptive analysis of environmental disclosures: a study of the us chemical industry

Eco-Management and AuditingEco-Mgmt. Aud. 5, 22–37 (1998)

A DESCRIPTIVE ANALYSIS OFENVIRONMENTALDISCLOSURES: A STUDY OFTHE US CHEMICAL INDUSTRYSarah D. Stanwick* and Peter A. Stanwick

Auburn University, USA

An empirical study was conducted toexamine the nature of environmentaldisclosures of 29 firms in the chemicalindustry. From the examination of over3700 disclosures, the results show thatthe type of disclosures presented acrossfirms and across industries varied basedon a number of factors. The disclosureswere analyzed based on medium, focus,channel of communication, time span,subject and environmental regulation.The results showed that the majority ofthe disclosures were found in the press,presented current environmental issues,were non-technical in nature, werequalitative in nature and dealt withpollution and environmental expenditureissues. ? 1998 John Wiley & Sons, Ltdand ERP Environment.

Revised 8 December 1997Accepted 15 Decenber 1997

INTRODUCTION

C oncerning corporate environmental issues,Jensen (1977) states ‘In most instances weare still groping in the dark concerning

what to disclose, how to disclose it and how to

compare and evaluate business enterprises.’ Thisstatement continues to be valid given the currentfocus by the general public on environmentalissues and the lack of standardized environmentalreporting guidelines. This study explores theincreasing environmental awareness of chemicalcompanies by descriptively examining environ-mental disclosures made by a sample of 29chemical firms. Cooper and Ijiri (1983) define adisclosure as an explanation or exhibit attached toa financial statement or embodied in a reportcontaining a fact, opinion or detail required orhelpful in the interpretation of the statementor the report. The term report is expanded inthis study to include Environmental ProtectionAgency reports and press reports, in addition tothe firm reports that are typically examined. Theterm ‘environmental disclosures’ is defined asdisclosures made by a firm which address thepresent state of the earth’s natural environment.These disclosures are appropriately distinguishedfrom disclosures made concerning a firm’soperating environment.

TYPES OF DISCLOSURES

The social and legal environments in which firmsoperate affect financial reporting (FASB, 1978).These circumstances require recognition ofenvironmental issues pertaining to firm operationsand appropriate disclosure of these matters tothe public. The resulting corporate environ-mental disclosures are made from both a volun-tary perspective and a mandatory perspective.Mandatory disclosures are made with respectto the firm’s compliance with environmentalregulations. These disclosures may also be made

*Correspondence to: Sarah D. Stanwick, Auburn University,345 College of Business, School of Accountancy, Auburn, AL36849-5247, USA.

CCC 0968-9427/98/010022–16 $17.50? 1998 John Wiley & Sons, Ltd and ERP Environment.

ECO-MANAGEMENT AND AUDITING

to reflect a firm’s lack of compliance with environ-mental regulations. In addition, firms are requiredby the Securities and Exchange Commission todisclose any material effects of compliance withfederal, state and local environmental regulationsin their 10-Ks. Any material expenditures forenvironmental control facilities must be disclosed(17 CFR Ch. 11 paragraph 229.101). In contrastto mandatory disclosures, some firms makevoluntary disclosures addressing environmentalclean-up and compliance activities. These dis-closures show an increased acceptance of socialresponsibility and an attempt to promote publicawareness of firm activities. Both voluntary andmandatory environmental disclosures may bequantitative or qualitative in form, depending onmanagement disclosure decisions and requiredregulatory disclosures. Both types of environ-mental disclosures are explored in this research.

USE OF DISCLOSURES

Environmental disclosure issues are important to avariety of users. Statement of Financial AccountingConcepts (SFAC) No. 1: Objectives of FinancialReporting by Business Enterprises (FASB, 1978)recognizes that economic decisions are based onindividuals’ relationships with and knowledge ofthe business enterprises. SFAC 1 states

‘Among the potential users are owners,lenders, suppliers, potential investors andcreditors, employees, management, directors,customers, financial analysts and advisors,brokers, underwriters, stock exchanges, law-yers, economists, taxing authorities, regulat-ory authorities, legislators, financial press andreporting agencies, labor unions, trade associ-ations, business researchers, teachers and stu-dents, and the public’ (p. 11, paragraph 24).

Users’ access to social responsibility information(i.e., environmental information) varies signifi-cantly with the extent of disclosures made bycorporations (AICPA, 1977). The amount of infor-mation available to any individual user varies withthe user’s persistence in tracking down the infor-mation (AICPA, 1977). Without a better under-standing of the informational disclosures currentlybeing provided, it will be difficult to understandeach user’s relationship with the environmentalinformation. This study provides insight into theenvironmental information being disclosed by andabout firms.

During audit planning, auditors should con-sider matters relating to the specific industry inwhich their clients operate (AU section 311.07).As such, when dealing with many industries,auditors will be called upon to attest to thefairness of environmental cost and liability infor-mation. Thus, auditors must familiarize them-selves with the corporate environmentaldisclosures made by firms and how these dis-closures affect the accounting records and finan-cial statements. Through increased environmentalregulations, accountants are becoming increas-ingly involved with environmental information.Increased environmental awareness brings in-creased compliance and cleanup costs which willultimately affect the accounting records andreporting practices of firms.

Although corporations typically concentrateon generating a profit, recently businesses haveexpanded their purpose in their operating com-munities. This expanded mission includes both thegoal of operating a profitable business and achallenge of environmentalism.

This research addresses issues relating to thereporting implications of environmental infor-mation. The types, sources, frequencies and formsof various types of environmental disclosures areexamined for the sample firms. These issues willbe analyzed descriptively with the goal of provid-ing an initial understanding of the characteristicsof environmental disclosures. Disclosures fromthree sources—the Environmental ProtectionAgency (EPA), the press and the individualfirms—are summarized and classified into fourcategories. These four categories include (i)medium, (ii) focus, (iii) time span and (iv) channelof communication. The findings of this researchshould provide users with a more completeunderstanding of environmental disclosures.

PREVIOUS RESEARCH ONENVIRONMENTAL DISCLOSURES

When compared to other areas of accountingresearch, environmental accounting issues havereceived little attention in academic journals.However, this trend should change as theAmerican Institute of Certified Public Accountants(AICPA), the Financial Accounting StandardsBoard, public accounting firms and accountingresearchers continue to probe and discuss theissues surrounding environmental liabilities andthe development of standards for guidance in

ENVIRONMENTAL DISCLOSURES

? 1998 John Wiley & Sons, Ltd and ERP Environment. Eco-Mgmt. Aud. 5, 22–37 (1998)

23ECO-MANAGEMENT AND AUDITING

this area of accounting. Most recently, theAICPA has issued a statement of position,‘Environmental Remediation Liabilities SOP 96-1’,which provides a discussion of major environ-mental legislation and authoritative guidance onissues related to the recognition, measure-ment, display and disclosure of environmentalremediation liabilities.

Many accounting researchers examineenvironmental issues by utilizing content analysisto explore the substance of disclosures. Contentanalysis is a statistical technique that allowsresearchers to make inferences about messagesin text. Other researchers have developed theirown measures to explore firm environmentalperformance and the subsequent effect on financialperformance. This section provides an overviewof the existing literature which examines environ-mental information using these approaches.

Using content analysis, Ingram and Frazier(1980) examined the relationship between themeasures of a firm’s environmental performanceand the environmental disclosures contained inthe firm’s annual report. The study’s results indi-cated only a weak association between thequantitative disclosure content measures andthe independent social performance measures.Attributing their findings to a lack of externalmonitoring of firms’ social disclosures, Ingramand Frazier concluded that investors discountenvironmental information.

Using a self-developed indexing procedure,Wiseman (1982) analyzed the contents of annualreports for companies from the steel, oil, and pulpand paper industries. Specifically, the relationshipbetween the firms’ environmental disclosures intheir annual reports and the firms’ actual environ-mental performance as measured by the Councilon Economic Priorities was examined. Wisemantested the hypothesis that there is no significantassociation between the Council on EconomicPriorities environmental performance rankingsand the environmental disclosure index rankings.This hypothesis was rejected only for the pulpand paper industry. The author found that thelength of the disclosure was representative ofthe disclosure content. Additionally, the authorconcluded there is no relationship betweenthe information companies disclose about theirenvironmental performance and their actualenvironmental performance.

Using the indexing procedure developed byWiseman (1982) and an index developed by theCouncil on Economic Priorities, Freedman andWasley (1990) examined pollution performance

and pollution disclosures for four highly pollutingindustries (steel, oil, electric utilities and paper andpulp). Freedman and Wasley (1990) tested twohypotheses using correlational analysis: (i) there isno association between the environmental dis-closures made by firms in their annual reports andtheir actual environmental performance and (ii)there is no association between the environmentaldisclosures made by firms in their 10-Ks and theiractual environmental performance. The authorsconcluded that neither voluntary annual reportenvironmental disclosures nor mandatory 10-Kdisclosures are representative of actual firmenvironmental performance. This finding isinteresting because one would expect firms toattempt to provide a true and accurate picture oftheir environmental activities, especially whenrequired to do so under the Federal SecuritiesLaws.

Other studies have explored environmentalinformation from a field experiment perspective.One such study by Rockness (1985) used a fieldexperiment design to explore voluntary environ-mental disclosures. Subjects, including MBAstudents, financial analysts, environmental protec-tion organization members and environmentalregulators, evaluated firm environmental perform-ance based on actual annual report disclosures.Participants evaluated one of three industrygroups, which included the steel industry, the oilindustry and the pulp and paper industry. Thestudy’s results showed that environmental dis-closures made in corporate annual reports pro-vided sufficient information for diverse users toform consistent and comparative evaluations offirms’ environmental performance. However,when these environmental disclosures werecompared with Council on Economic Prioritiesinterpretations of actual environmental perform-ance, the value of present environmental dis-closures was inconclusive. Thus, the authorreasoned that there is no association betweenthe content of annual reports and actual environ-mental performance.

Studies examining the liability associated withcorporate environmental information includethose by Rockness et al. (1986) and Hillison et al.(1989). Rockness et al. (1986) investigated threeissues for chemical companies: (i) the disclosure ofhazardous waste disposal information by chemicalcompanies who dump on private and public sites;(ii) the accrual of contingent liabilities relating towaste disposal at national priority sites and (iii)the association between hazardous waste disposaland firms’ financial performance. The majority of

S. D. STANWICK AND P. A. STANWICK


24 ECO-MANAGEMENT AND AUDITING

the sample firms included environmental perform-ance reports in their annual reports, but did notdisclose specific information on hazardous wastedisposal. Rockness et al. (1986) concluded thatchemical companies (or their accounting firms) donot adequately reflect the potential liability relat-ing to hazardous waste disposal, even thoughevidence indicates that cleanup costs may bematerial. Based on the results, the authors couldnot form concrete conclusions about the associ-ation between hazardous waste disposal andfinancial performance. Hillison, Jordan and Pogach(1989) explored the potential liability associatedwith the underground injection of waste. Theirstudy explored the impact of accounting onsociety’s decisions involving waste disposalinstead of exploring the market effect of suchinformation. The authors examined the use offinancial statements by the EPA in regulatingunderground disposal of liquid waste throughinjection wells. The authors’ conclusion, which hasan impact on accountants through their involve-ment in the attestation function, is that accountingterminology utilized by the EPA appeared to beambiguous and possibly inconsistent with GAAP.The authors suggested that the accounting pro-fession should seek to educate governmentagencies and the public about the appropriatenessof using financial statements in making socialdecisions and should encourage reevaluation ofreliance on traditional financial information tomake social decisions.

Each of these studies has examined corporateenvironmental information and has attempted toprovide a joint understanding of environmentalperformance and financial performance. Thesestudies provide motivation for this research intwo ways. First, it could be concluded from thestudies reviewed that firm environmental dis-closures are, perhaps, not indicative of firmenvironmental performance. Currently, there areno indices to measure environmental performance.Additionally, although there is disagreementabout the importance of social and environmentalinformation, these studies show that environ-mental information is being reported. This area isfurther explored in this study by examining thesources, types, forms and frequencies of environ-mental disclosures made by chemical firms.

RESEARCH METHODOLOGY

As discussed in the previous section, the extantliterature dealing with environmental disclosures

is limited. Archival data, including environmentaldisclosures published in the press, environmentaldisclosures published in firm documents andenvironmental disclosures published by theEnvironmental Protection Agency (EPA), will pro-vide the primary data sources for this research.The research question addressed is ‘What are theforms, types, frequencies and sources of environ-mental disclosures for firms in the chemical in-dustry?’ The sample consists of firms initiallyidentified from the Chemical ManufacturersAssociation (CMA) membership list. The analysisof firm environmental disclosures is primarilydescriptive in nature. A classification schemeconsisting of four categories is utilized. Thecategories include (i) medium, (ii) focus, (iii)channel of communication and (iv) time span.Operationalizations of each of these categoriesare presented later in this section.

Sample Selection

Although many industries are affected byenvironmental issues, this study focuses onchemical firms. The chemical industry is examinedfor several reasons. First, many EnvironmentalProtection Agency (EPA) regulations affect thechemical industry in some aspect, from productionthrough product distribution. In order to operatein the United States, the firms must follow theseregulations or possibly face severe fines or otherrepercussions. The chemical industry, traditionallyranked as one of the nation’s leading environ-mental and public health risks (CMA, 1991), waschosen for examination in this research becausenumerous chemical firms have recently adoptedthe Responsible Care Plan, a set of initiativesissued by the Chemical Manufacturers Associ-ation (CMA), which include environmental aware-ness. Thus, the sample firms, through theirmembership in the CMA, accept a challenge ofenvironmentalism in their operating communities.

Second, Moody’s Investment Corporation hasrecognized the chemical industry as an industrywhich may bear substantial future costs forenvironmental compliance and cleanup (Buhr andRay, 1991). Moody’s believes that these costswill have a substantial impact on the credit pro-file of the chemical industry and that chemicalcompanies will carry the greatest potential en-vironmental risks. Because the chemical industrywill bear substantial cleanup and compliance costsassociated with EPA regulations, ‘Moody’s willcontinue to monitor the effects of these increasedcosts on the US chemical industry’s international




competitive position’ (Buhr and Ray, 1991, 1). Inaddition, past accounting research has classifiedthe chemical industry as a highly polluting indus-try (i.e., Freedman and Jaggi, 1982; Rockness et al.,1986).

Finally, in 1988, the CMA approved theResponsible Care Plan designed to help the indus-try improve its management of chemicals (CMA,1991). Through this program, the CMA hopes toincrease public and industry awareness of health,safety and environmental quality. Any firm join-ing the CMA must commit to the ResponsibleCare Plan. Specifically, the Responsible Care Plancovers six initiatives that include (i) communityawareness and responsible care, (ii) pollution pre-vention, (iii) process safety, (iv) distribution, (v)employee health and safety and (vi) productstewardship. The most stringent of these areas isthe pollution prevention goal (Harris, 1991). As aresult of the adoption of the Responsible CarePlan, the CMA expects member firms to showincreased voluntary disclosure involvement anda continued reduction of emissions into theenvironment (CMA, 1991). Likely sources forthese voluntary disclosures of firm environmentalprogress include the press, annual reports andfinancial statements. By adopting this plan, chemi-cal firms are demonstrating that, as a whole, theyare attempting to change society’s perception thatthe chemical industry is one of the nation’shighest environmental and public health risks.

The CMA serves as the trade organization forthe chemical industry and focuses on legislative,regulatory and legal matters affecting the chemi-cal industry. The sample for this research isderived from the member list of the CMA.Approximately 185 companies belong to thisassociation and these 185 companies compriseapproximately 90% of the United States’ produc-tive capacity of the chemical industry (CMA,1991).

Time Period

The focus of the study, in part, was to seewhether the introduction of the Responsible CareInitiatives resulted in a higher level of environ-mental disclosures pertaining to firms in thechemical industry. Information for each firm wasgathered and summarized for a three-year periodwhich begins with calendar year 1988 and endswith calendar year 1990. During 1989, the CMAorganized a Public Advisory Panel for theResponsible Care Initiatives. This panel’s primaryresponsibility was to advise the chemical industry

on the Responsible Care Plan. In addition, thispanel sought to broaden chemical firms’ under-standing of any public concerns associated withthe use of chemicals in our society (CMA, 1991).Thus, this three-year period allowed considerationof firm environmental disclosures made one yearbefore and one year after the Public AdvisoryPanel was established, as well as evaluation duringthe year of establishment.

Data Search

To provide a descriptive analysis of the environ-mental disclosures for chemical firms, this researchexamined publicly available information obtainedfrom three sources. The disclosure sources include(i) information from the firm (which includesannual reports with audited financial statementsand SEC Form 10-Ks), (ii) information from theFederal Environmental Protection Agency (EPA)and (iii) information appearing in the financial andtechnical press.

For each sample firm, environmental disclosuresfrom a variety of sources were examined.EPA disclosures were obtained directly from theEPA using the Freedom of Information Act andother publicly available EPA information. Thisinformation included amount of emissions (e.g.,air and water), litigations filed against the firms,sanctions imposed against the firms and finescharged. EPA environmental news releases,EPA press advisories and EPA notes to corre-spondents were the primary sources of thisinformation.

Environmental disclosures made in the firm’sannual reports and SEC Form 10-Ks wereobtained using Nexis, computerized microfichesystems and information available directly fromthe organization. The annual reports and SECForm 10-Ks for 1988, 1989 and 1990 wereavailable through Nexis, microfiche systems andthe firms directly.

Finally, financial and technical press disclosureswere obtained using Nexis and Business Newsbank.These sources provided access to newspapers,magazines, regional business sources, and tradeand industry publications.

Disclosure Classifications

This study is descriptive in nature and, thus, theprimary motivation is to provide an understand-ing of the level and types of environmentaldisclosures made in chemical firms and the sources




used to convey this information to the public. Theanalysis used to describe the data is primarily of acategorical nature. This section identifies anddefines the classifications used in characterizingthe disclosures identified from the informationalsearch. Each disclosure examined is classifiedaccording to medium, focus, channel of com-munication, time span, subject matter andenvironmental regulations.

MediumLessem (1977) describes the classification ofmedium as quantitative in monetary terms or innon-monetary terms, qualitative or pictorial—animation, diagram or photograph. The environ-mental disclosures are classified as monetaryquantitative, non-monetary quantitative orqualitative.

FocusThe disclosures are classified as technical if thedisclosure mentions the actual technique used toachieve the environmental goal or activity. Anon-technical status is assigned if no actualmethod is discussed in the disclosure.

Channel of CommunicationLessem (1977) describes the channel of socialresponsibility documentation as staff newspaper,annual report or general company document,social report or specific issue report. This studywill use channel of communication as one classi-fication category. The disclosures are classifiedbased on the disclosure source: EPA, press andfirm. A further sub-classification for each of thethree groups is assigned to recognize the specificdisclosure source.

Time SpanThe environmental disclosures are classifiedaccording to the time period mentioned in ordirectly inferred from the disclosure to meet thegoal or activity. That is, if the activity is underway immediately, a current status is assigned. Apast status is assigned if the event has alreadyoccurred. A short-term classification refers todisclosures made for activities expected to becompleted in less than one year and a long-termclassification refers to those disclosures with com-pletion expected in more than one year. Likewise,any disclosure applying more than one of theseclassifications is assigned a mixture classification.

Subject MatterThe disclosures were also classified based on thecontent of the subject matter. Some examples ofsubject matter in the disclosures include CFCs,environmental awards, pollution issues, recycling,environmental expenditures and environmentalpractices.

Environmental RegulationsFinally, the disclosures were classified based onwhether they referred to specific environmentalregulations including the Clean Air Act, theClean Water Act, the Hazardous MaterialsTransportation Act and the Superfund Act.

RESULTS

This section presents the results of this study.Specifically, a description of the environmentaldisclosures made by and about a sample of firmsin the chemical industry is provided. The researchquestion addressed is ‘what are the forms, types,frequencies and sources of environmental dis-closures for firms in the chemical industry?’ There-fore, the primary goal of this research is toprovide an initial understanding of the character-istics of environmental disclosures and the relatedfirms making the disclosures. First, the sampleselection procedure is described and the final listof firms examined is provided. Second, the specificsources of disclosures are described. Third, thecategory classifications used to examine dis-closures from all sources are discussed. Asummary of the disclosures is given in this sectionwhich identifies all disclosures examined in termsof medium, focus, channel of communication andtime span classifications.

Sample Selection

In order for a firm to be included in the sample offirms, the firm must meet several inclusion criteria.These criteria include the following.

• Membership of the CMA, whereby acceptingthe Responsible Care Initiatives adopted by theCMA. In addition, the firm must not be listedon the CMA membership roster as a division ofa larger corporation.

• Data availability on CRSP and Compustat forthe three year time period, 1988 through 1990.

• Availability of full text Form 10-Ks and AnnualReports.

• Availability of emissions information from theEPA.




This procedure resulted in a total of 29 firms inthe sample. The firms are shown in Table 1.

Environmental disclosures from three sourcesare examined for each of the firms listed inTable 1. These sources include press disclosures,EPA disclosures and firm disclosures. The nextsection describes the procedure used to obtain thedisclosures from these sources.

Data Sources

Using a primarily descriptive approach, threesources of information are examined in this studyto provide a more thorough understanding of theenvironmental disclosures made by and aboutchemical firms. The first source includes dis-closures made in the press, consisting ofmagazines, journals and newspapers. The secondsource includes disclosures made by the firm,consisting of annual reports and form 10-Ks.The final source examined is EPA publicationswhich include press releases, press advisories,environmental news releases and notes tocorrespondents. The procedure used to obtain thedata sources and the results from examining thedata are discussed in this section.

A total of 1783 documents were examined forreferences to the sample firms’ environmentalactivities. From these documents, a total of 3705different disclosures were examined. There weremore disclosures than documents because mostdocuments either mentioned more than oneenvironmental activity, as in an annual report, ormentioned more than one firm, as in the case ofnewspaper articles concerning Toxic ReleaseInventory summaries. All of the results presentedin this section are based on the actual number ofdisclosures rather than on the actual number ofdocuments examined. Table 2 provides a break-down of the disclosures by year. The procedurefor obtaining each source of data is describedbelow.

Table 2 shows a dramatic increase in thenumber of disclosures over the three-year timeperiod. There is an 88% increase in the number ofdisclosures from 1988 to 1989 (from 691 to 1302)and a 31% increase from 1989 to 1990 (1302to 1712). This provides evidence that as theResponsible Care Plan was being implemented bythe CMA, more environmental information wasbecoming available to the public.

Press Disclosures

The press disclosures examined were identifiedfrom Business Newsbank and Nexis. Both of thesesystems are computerized databases which refer-ence newspapers and other publications. Using acomputerized system expanded the search forenvironmental references, providing an increasedsample size for examination in this study. Inaddition, the use of computerized databasesallowed a substantial time saving in locating theactual articles because each system offers a fulltext option.

Firm Disclosures

For each firm included in the sample, Form 10-Ksand annual reports were examined for a three-year

Table 1. Sample firms.

Air Products and ChemicalsAllied Signal Inc.American Cyanamid CompanyBorden Chemicals and Plastics, OLPCabot CorporationThe Dow Chemical CompanyE.I. Du Pont de Nemours and CompanyEngelhard CorporationEthyl CorporationFerro CorporationFMC CorporationThe B.F. Goodrich CompanyGreat Lakes Chemical CompanyHercules CorporationEli Lilly and CompanyMerck and Co., Inc.Monsanto CompanyOccidental Petroleum CorporationOlin CorporationOwens Corning Fiberglass CorporationPfizer Inc.The Procter and Gamble CompanyQuantum Chemical CorporationRohm and Haas CompanyStepan CompanySterling Chemicals, Inc.Union Carbide CorporationVista Chemical CorporationWitco Corporation

Table 2. Total disclosures.

Year Total Disclosures

1988 6911989 13021990 1712

Total 3705




time period, 1988 through 1990. For each firm, aminimum of six firm-related documents wereexamined. Some firms provided firm specificenvironmental information.

A three-step process was used to collect thefirm documents. First, all firms were contactedthrough letter requesting the six documentsand any documents which addressed thefirm’s environmental policies. Second, firmsnot responding to the initial request weresearched using Nexis company files. This on-line library contains full text Form 10-Ks andannual reports. Finally, any firm documentsunavailable directly from the company or fromthe online search of Nexis were obtainedusing annual reports found in microfiche form.Using these resources, a complete set of docu-ments was obtained for the each of the samplefirms.

EPA Disclosures

Obtaining documents from the US EPA wasbased on the Freedom of Information Act. TheFreedom of Information Act provides access to

most records of federal agencies. These recordsinclude papers, reports, letters, films, computertapes, photographs and sound recordings(Reporters Committee, 1987). Environmentalpress releases, press advisories, environmentalnews and notes to correspondents for theperiod of time beginning 1 January 1988 through31 December 1990 were requested from the tenregions of the EPA. Table 3 summarizes the statesof coverage in each region and the status ofobtaining documents from these regional EPAoffices. In addition to the documents obtainedfrom the individual regions of the EPA, region 4provided documents issued by the Federal EPAoffice in Washington, DC.

Disclosure Classification Results

Environmental disclosures were classified accord-ing to channel of communication, medium, focus,time span, subject classification and environmentalregulation classification in order to provide infor-mation concerning the form, frequencies andtypes of disclosures. Each of these classifications issummarized below.

Table 3. EPA disclosure status.

Region No. States covered Status of documentation

1 Connecticut, Massachusetts, Appeal under considerationMaine, Rhode Island, Vermont, at time of study completion

2 New Jersey, New York, Puerto Would not comply afterRico, Virgin Islands numerous attempts to obtain documents

3 Delaware, District of RespondedColumbia, Maryland, Pennsylvania,West Virginia, Virginia

4 Alabama, Florida, Georgia, RespondedNorth Carolina, Kentucky,Mississippi, South Carolina,Tennessee

5 Illinois, Indiana, Michigan, RespondedMinnesota, Ohio, Wisconsin

6 Arkansas, Louisiana, New RespondedMexico, Oklahoma, Texas

7 Iowa, Kansas, Missouri, RespondedNebraska

8 Colorado, Montana, Wyoming, RespondedNorth Dakota, South Dakota,Utah

9 Arizona, California, Hawaii, Would not comply afterNevada, American Samoa, numerous attempts to obtainGuam, Trust Territories of the documentsPacific

10 Alaska, Idaho, Oregon, RespondedWashington




Channel of CommunicationThe first classification scheme for the environ-mental disclosures is channel of communication.The channel of communication classification rep-resents one of the three sources of disclosuresexamined. These sources include EPA disclosures,firm disclosures and press disclosures. Table 4provides a summary of the disclosures examinedfrom each of the three sources during each of thethree years in the sample period.

Table 4 shows that the number of disclosuresincreased in two of the three sources over thethree-year time period. In total, the number ofdisclosures increased in each year. It is especiallyimportant to note the increase in firm disclosures.This provides evidence that firms may beresponding to a challenge of environmentalism byreporting their environmental activities to thepublic through their own documents.

MediumThe classification of medium was used to describedisclosures in terms of their monetary or non-monetary characteristics. Specifically, the classifi-cations of monetary quantitative, non-monetaryquantitative and qualitative were used. A classifi-cation of monetary quantitative was assigned to adisclosure if the environmental disclosure wasdescribed in terms of monetary characteristics. Inmost instances, this represented the amount thefirm would spend to correct an environmentalproblem or to prevent further environmentalproblems. The monetary classification overridesthe other two types of classification. Non-monetary quantitative classifications overridequalitative classifications. The non-monetaryquantitative classification was assigned to en-vironmental disclosures that did not present theinformation in monetary terms, but discussed theenvironmental issue in terms of some non-monetary measure. In most instances, the amountof emissions was the primary source of thenonmonetary classification. A qualitative classi-fication was assigned if the environmental dis-closure did not mention any non-monetary or

monetary information. These articles weretypically very broad in their explanation of theenvironmental issues.

Table 5 summarizes the medium classificationsfor the three-year time period.

Table 5 provides evidence that the disclosuresin each year increased and that, in all three years,over 60% of the disclosures were qualitative innature. In addition, in all three years (1988, 65.5%;1989, 62.2%; 1990, 63.7%) the number ofmonetary quantitative disclosures exceeded thenumber of non-monetary quantitative disclosures.This demonstrates that the increased environ-mental responsiveness of the firm is based on notonly the description of monetary issues but alsoon an increased level of description of the overallcommitment to the environment.

FocusAn important aspect of understanding environ-mental disclosures made by the sample firms is toclassify the disclosures in terms of their focus. Inthis study, focus is defined as technical or non-technical disclosures. A disclosure is classified astechnical if the actual technique used to achievethe environmental goal or activity is mentionedin the disclosure. A nontechnical classificationis assigned to a disclosure if no technique fordealing with the environmental issue is providedin the disclosure. Table 6 summarizes the focus

Table 4. Sources of disclosures.

Source 1988 1989 1990 Total

EPA 16 32 29 77Firm 308 516 599 1423Press 367 754 1084 2205Total 691 1302 1712 3705

Table 5. Summary of disclosures by medium.

Medium 1988 1989 1990 Total

Monetary quantitativeEPA 5 10 9 24Firm 104 175 196 475Press 103 197 270 571Subtotal 212 382 475 1069

Non-monetary quantitativeEPA 0 0 5 5Firm 0 7 15 22Press 26 103 126 255Subtotal 26 110 146 282

QualitativeEPA 11 22 15 48Firm 204 334 388 926Press 238 454 688 1380Subtotal 453 810 1091 2354

Total 691 1302 1712 3705




classification for the environmental disclosuresexamined.

The results shown above indicate that dis-closures from all three sources are primarily non-technical in nature (96.1% of the disclosures). ForEPA disclosures, the results show that 24.7% ofthe disclosures are technical in nature, while of thefirm and press disclosures, only 0.9% and 5.0%of the disclosures are technical in nature. Thisresult may be related to the actual source of thedisclosure. The EPA addresses very specificenvironmental issues, while the firm and the pressmay be interested in merely identifying issues andreporting those issues to the public. This was alsoshown in the qualitative nature of the disclosuresthat were presented in Table 5.

Time SpanThe fourth classification scheme used to describethe environmental disclosures is the time spanmentioned in or directly inferred from theenvironmental disclosures. Five classificationswere used to describe the environmental dis-closures. A current classification is assigned if theactivity is under way immediately. A past status isassigned if the activity has already taken place. Ashort-term classification is assigned if the activityis expected to be completed in one year or less.Disclosures were classified as long term if com-pletion was expected in more than one year.Finally, a mixture classification was assigned if thedisclosure made reference to two or more of theabove classifications. Table 7 presents the resultsof classifying the environmental disclosures basedon the time span.

Table 7 provides the results of the disclosureclassifications by the time span inferred in thedisclosures. When the disclosures are aggregatedover the three years, the majority of the environ-mental disclosures reported current environmentalissues (1988, 61.0%; 1989, 61.0%; 1990, 62.4%).This result is true for all three disclosure sources.However, the results show that environmentalissues can be continuous in nature for organiz-ations. The disclosures also referred to past events(9.3%) as well as future resolutions of environ-mental issues (3.3% for short-term and 7.5% forlong-term future events). In addition, multipletime periods were also addressed in 18.4% of thedisclosures.

Subject ClassificationAn additional classification scheme used todescribe the environmental disclosures is subjectmatter. A variety of subject matters were

Table 6. Summary of disclosures by focus.

Focus 1988 1989 1990 TOTAL

Technical:EPA 4 7 8 19Firm 1 9 3 13Press 21 48 41 110Subtotal 26 64 52 142

Non-technical:EPA 12 25 21 58Firm 307 507 596 1410Press 346 706 1043 2096Subtotal 665 1238 1660 3563

Total 691 1302 1712 3705

Table 7. Summary of disclosures by time span.

Time span classification 1988 1989 1990 Total

Current:EPA 11 23 22 56Firm 224 343 419 986Press 185 416 628 1229Subtotal 420 782 1069 2271

Past:EPA 0 1 3 4Firm 4 14 13 31Press 43 112 155 311Subtotal 47 127 171 345

Short term:EPA 3 3 0 6Firm 5 13 11 29Press 7 33 49 89Subtotal 15 49 60 124

Long term:EPA 0 2 2 4Firm 15 27 24 66Press 50 70 91 211Subtotal 65 99 117 281

Mixture:EPA 2 3 2 7Firm 60 119 132 311Press 82 123 161 366Subtotal 144 245 295 684

Total 691 1302 1712 3705




discussed in the disclosures, as illustrated in Table8. The categories shown in Table 8 are mutuallyexclusive categories.

Table 8 summarizes the subject of each of the3705 disclosures examined. This table shows thatthe majority of the articles discussed pollutionissues. The second highest subject discussed is theexpenditures and liabilities category. This pro-vides evidence that the sample firms are dis-closing information about their environmental

liabilities. This would also support the largenumber of disclosures that are monetary in nature.In addition, for both of these categories, thenumber of disclosures increased during the three-year sample period. The results show that thesample firms are addressing the six major codes ofResponsible Care. A total of 47 disclosuresreferred directly to Responsible Care Initiatives. Inaddition, within the 3705 disclosures, referenceswere made to each of the six codes of ResponsibleCare. See Table 9 for a summary of the linkbetween subject matter and the six codes ofResponsible Care.

Regulation ClassificationThe chemical industry is a highly regulatedindustry. The environmental disclosures wereclassified according to environmental regulationsmentioned in the disclosures. Table 10 providesthe results of classifying the disclosures accordingto regulations. Of those environmental regula-tions that were disclosed, 29.3% referred to Super-fund issues and 14.6% referred to communityright to know/Superfund amendments.

The results shown in Table 10 indicate thatthree quarters of the environmental disclosuresdid not specifically mention any environmentalregulations. This may indicate that the sources ofthe environmental regulations, excluding the EPA,are unconcerned with reporting the exactenvironmental regulation and that it is onlynecessary to report the environmental issues tothe public. This would support the non-technicalnature of the majority of the disclosures.

Summary of Disclosure ClassificationThis section has summarized the environmentaldisclosures made by a sample of 29 chemical firms

Table 8. Summary of disclosures by subject.

Subject 1988 1989 1990 Total

CFCs 83 92 80 255Env compliance 66 76 110 252General environment 17 46 79 142Insurance 14 37 33 84Env regulations 31 45 53 129Responsible care 4 20 23 47Env litigation 25 40 46 111Water issues 12 55 52 119Air issues 21 76 97 194Pollution issues 151 260 284 695Recycling 14 85 128 227Superfund/PRP 41 74 64 179Environmental practices 7 25 35 67Emergency planning 4 9 13 26Env products/packaging 40 102 235 377Env technology 38 87 116 241Env expenditures and liab 99 135 184 418Transportation issues 4 12 7 23Env protests and groups 5 3 4 12Environmental education 3 2 17 22Earth day 0 4 32 36Environmental awards 5 10 7 22Ground issues 7 7 13 27Total 691 1302 1792 3705

Table 9. Matching of the six codes of responsible care and subject matter classification.

Responsible care code Subject matter classification

1. Community awareness and Recycling, environmental awards,emergency response Earth Day, environmental compliance,

general environment, responsiblecare, emergency planning, environmentalprotest and groups

2. Pollution prevention CFCs, water issues, air issues, pollutionissues, ground issues

3. Process safety Environmental practices, environmentaltechnology

4. Distribution Transportation5. Employee health and safety Environmental education6. Product stewardship Environmental products/packaging




over a three-year time period. The examinationrevealed that firms are making environmentaldisclosures in their annual reports and in their SECForm 10-Ks. In addition, the EPA and the pressare making disclosures about the sample firms. Atotal of 3705 environmental disclosures weremade about the 29 sample firms. The majority ofthese environmental disclosures were (i) qualita-tive in nature—defined as disclosures whichdescribe the environmental issue in non-quantitative terms, (ii) non-technical in nature—defined as disclosures which did not mention anyspecific technique used to correct the environ-mental issue, (iii) current in nature—defined asdisclosures which deal with an environmentalissue/activity that was under way immediately,(iv) found in the press publications-primarilynewspapers, magazines and journals, (v) dealtprimarily with pollution issues and (vi) did notmention any specific environmental regulations.

CONCLUSIONS AND SUGGESTIONSFOR FUTURE RESEARCH

This research examined 3705 environmental dis-closures for 29 chemical firms. The chemicalindustry was chosen for consideration because ofits attempt to enhance its public perception, inpart, by encouraging firms to abide by the

Responsible Care Plan sponsored by the CMA.The disclosures encompassed a three-year timeperiod, 1988 through 1990, and were found inthree channels of communication. The channels ofcommunication included the EPA, the firm and thepress.

Environmental regulations, accounting/auditingstandards and federal securities regulations werealso examined. This examination demonstratedthat chemical firms are impacted by both regula-tions issued by the EPA and the guidelinespresented in the Responsible Care Initiatives.Firms provide environmental information to theEPA which is made available to the public. Inaddition, the federal securities laws and severalaccounting/auditing regulations require reportingof the environmental information to the public.Firms are required to report environmentalcontingencies based on Financial AccountingStandards Board Statement No. 5, ‘Accountingfor Contingencies’. In addition, firms mustreport information about environmental capitalexpenditures in their SEC Form 10-Ks.

The examination of the 3705 disclosures issuedby the press, the firm and the EPA revealed someinteresting information about the disclosures. Theinformation included the following:

• The majority of the disclosures were found inthe press. This result is not surprising, giventhe vast array of newspapers, journals and

Table 10. Summary of disclosures by environmental regulations.

Regulation 1988 1989 1990 Total

None mentioned 481 984 1314 2779Superfund 66 109 97 272Emergency planning and

community right toknow/superfund amendments 47 42 47 136

Resource recovery andconservation 13 19 30 62

Clean water act 5 13 10 28Clean Air Act 10 27 67 104Safe Drinking Water Act 1 0 0 1Toxic Substances Control Act 4 14 13 31Federal Insecticides, Fungicides

and Rodenticides Act 1 6 18 25Hazardous Materials Trans Act 3 3 0 6Other 42 42 42 134Two regulations mentioned 14 27 45 86Three regulations mentioned 2 11 13 26Four regulations mentioned 0 2 4 6Five or more regulations mentioned 2 3 4 9Total 691 1302 1712 3705




magazines that could potentially report theenvironmental information.

• The majority of the disclosures presentedcurrent environmental issues to the public. Thisresult could be based on the nature of the pressdisclosures. Newspapers typically report onlycurrent information to the public, whilemagazines and journals provide more datedinformation to readers.

• The majority of the disclosures were non-technical in nature. This result provides evi-dence that the press may be merely reportingenvironmental problems, rather than offeringreaders a more technical description of theenvironmental issues.

• The majority of the disclosures were qualitativein nature. This result could be due, in part, tothe difficulty of estimating the cost of theenvironmental problems. In many cases, anestimate of the damages is very difficult toobtain.

• The majority of the disclosures dealt withpollution issues. Pollution issues, such as gen-eral pollution issues, water issues, ground issuesand air issues, tended to dominate the dis-closures made by and about the firms. Pollutionissues were followed in number by disclosuresdealing with the environmental expendituresand liabilities category. This result providesevidence that firms are reporting costs andliabilities associated with their environmentalactivities. However, all six codes of Respon-sible Care were identified in the disclosures ofthe sample firms.

• The majority of the disclosures did not refer toany specific environmental regulation. Thisresult was surprising since the chemicalindustry is typically one of the most highlyregulated industries by the EPA.

The ‘greening’ of corporations consists oftwo basic processes. These processes include (i)cleaning up or correcting past environmentalproblems and (ii) preventing future environmentalproblems. However, as firms accept these respon-sibilities associated with environmental problems,they can use their own objectives to fulfill thereporting of environmental events, issues andproblems, unlike the situation that occurs withtypical accounting issues.

The search for guidelines for reporting environ-mental information is becoming increasingly moreimportant. Solomons (1986, 7) describes account-ing policy as ‘the body of rules auditors invokewhen they report to stockholders and directors of

a corporation that in their opinion the company’sfinancial statements present fairly its financialposition at the dates specified and the results ofoperations and changes in its financial position forthe years specified, in conformity with GAAPapplied on a consistent basis.’ From a policystandpoint, the results of the examination ofenvironmental disclosures provides support forthe need for an establishment of public reportingprocedures and standards. Currently, accountantsand auditors rely heavily on FASB 5, ‘Accountingfor Contingencies’. However, FASB 5 may notbe appropriate because many environmentalliabilities are very difficult to estimate and maynot be estimable until years after the firm realizesthe environmental problem exists. Beginning in1996, companies may also find guidance in SOP96-1, ‘Environmental Remediation Liabilities’. Thereview of the environmental disclosures made by29 chemical firms revealed that, although the firmsare beginning to accept a challenge of environ-mentalism and recognize responsibility for theirpast actions, the firms have unlimited choice in theselection of the mechanisms used for publicreporting. By providing a description of thedisclosures currently made, this study provides aninitial step in developing a framework for report-ing environmental information in financial reports.

With the increase in publicly available environ-mental information (e.g., the 1986 EmergencyPlanning and Community Right to Know Act),the public is beginning to demand information onfirms’ environmental performance and compliancewith laws and regulations. This public demandmay increase firms’ reporting of environmentalinformation as the firms try to change their publicimage. This study considers three publicly avail-able sources of disclosures for environmentalinformation. Only a limited number of studieshave examined information publicly availablefrom the EPA. Studies which examine pressreleases available from the EPA are absent fromthe accounting literature. These press releasesprovide an additional source of publicly availableinformation which must be explored further inthe accounting literature due to the impact ofenvironmental issues on financial statements.

Jane Adams of the Financial AccountingStandards Board reported that ‘ten years ago twopercent of capital spending was for environmentalmatters; today it is twenty percent’ (BNA, 1992,156). Environmental regulations, such as theSuperfund Act, the Resource Conservation andRecovery Act and the Clean Air Act, imposeenvironmental clean-up and settlement costs on




corporations which could have a material account-ing effect. Thus, these increased expenditurescould ultimately have a material effect on theearnings per share of a firm (Belkaoui, 1976). Inthe business realm, without realization of environ-mental efforts and cost control of environmentalclean-up efforts, the future existence of businessentities is challenged. The role the accountantultimately plays in the social reporting arena iscontingent on decision makers’ demand and useof the disclosed environmental information. Thisstudy aids in understanding the disclosurerequirements and the actual disclosures beingmade by chemical firms reporting environmentalactivities.

As in any research, limitations exist in themethodology applied. The limitations associatedwith this study are discussed below.

The environmental disclosures under exami-nation pertained to one industry. Although theresults may not be generalizable outside ofthe chemical industry, they may help identify thetypes of disclosure currently being made by firmsin the environmental area. Because the chemicalindustry is recognized as a highly polluting indus-try in the accounting literature (Freedman andJaggi, 1986; Rockness et al., 1986), this industrycould be indicative of the most extreme cases ofenvironmental problems and disclosure issues.Thus, although the results may not be directlyapplicable to other industries, the results may berepresentative of the important issues which needto be addressed when examining environmentaldisclosures.

A further limitation of this research is thatseveral regions of the EPA failed to respond torequests for information. Thus, press releases fromthree of the ten EPA regions were eliminatedfrom examination. These documents may haveprovided valuable information which wasexcluded due to the EPA’s lack of response to theinformational request.

Environmental accounting issues have beenrelatively unexplored in the accounting literature.However, as the public grows increasinglyaware of the effect the environment has on allbusinesses, the demand for environmental infor-mation from corporations will continue to rise.Several areas for future research examiningenvironmental issues and their relationship tothe accounting profession are identified in thefollowing paragraphs.

Freedman and Jaggi (1986) suggest furtherresearch in the examination of the associationbetween the extent of the disclosures and the

type of signals generated from these disclosures.It is possible that the environmental disclosuresbeing made by some firms and not by otherscould provide a signal to investors about thefirms’ valuation. As suggested by Watts andZimmerman (1986), the worst-performing firmswill not signal to the market. In terms of environ-mental disclosures, the signals may be providedby larger firms which have adequate resourcesto remedy the problem and fund preventivemeasures.

If investors and creditors are using environ-mental disclosures as surrogates to measure afirm’s environmental performance, further researchis needed to measure the quality of the disclosures(Wiseman, 1982). Behavioral studies may proveuseful to determine investors’ perceptions of vari-ous types of disclosure. It is difficult to determineinvestors’ reactions to environmental informationgiven the nature of the environmental disclosures.Some investors may view the disclosures in apositive sense while others may view the sameinformation negatively. Future research could con-centrate on finding an appropriate method forclassifying disclosures as positive or negative inorder to empirically investigate the investors’reaction to environmental issues.

This research concentrates on data from threesources: the EPA, the firm and the press. Theannual report of a firm may only provide limitedusefulness for examining disclosures of firmspecific environmental activities due to the largevolume of firm information that is releasedthrough this single document. Many firms arebeginning to release a self-reported ‘environ-mental report card’ within the annual report.As a result, they use the annual report as theirprimary means of public reporting about theirenvironmental and social activities.

Investors are not privy to subjectivelydetermined information within firms. Thus, it isimportant to conduct research in the developmentof uniform standards for environmental infor-mation measurement. Firms are accepting thechallenge of environmentalism in their opera-tional procedures, but each firm chooses its ownmethod to report this information to the public.In addition, investors may be influenced by theamount and presentation modes of the environ-mental information.

To date, most entities report financial andenvironmental accounting information separately.As suggested by Ramanathan (1976), the useful-ness and problems associated with integratingthese two areas needs to be addressed in future




research. In addition, the information presentedby corporations to date has been subjectivelymeasured and reported. Accountants will be calledupon to report and attest to information whichaddresses social and environmental issues.Research into the accountant’s role with reportingand attesting to this type of information isimperative.

Future research could consider other industries.Buhr and Ray (1991) recognize that severalindustries may be substantially affected byenvironmental issues. Some of the other industrieswhich could be affected, in addition to thechemical industry, are petroleum refining, metalsand mining, electrical equipment and electronics,plastic and rubber products, pharmaceuticals,waste management, pulp and paper and heavymanufacturing.

With the increased interest in both inter-national issues and environmental issues, theaccounting implications of environmental issuescould be explored more fully from a globalperspective. As Buhr and Ray (1991, 1) state,‘Moody’s believes that environmental liabilitiesmay pose significant credit risks because of theirsudden and possibly large financial obligations onpast generators of waste materials. In addition,increased regulatory compliance costs may add tooperating costs for American companies com-pared to offshore competition in certain indus-tries, possibly affecting their global competitiveposition’.

REFERENCES

American Institute of Certified Public Accountants (AICPA)(1977) The Measurement of Corporate Social Perform-ance, AICPA, New York.

Buhr, R. and Ray, R. (1991) Environmental risks andcorporate credit quality, Moody’s Special Comment.

Bureau of National Affairs, Inc. (BNA) (1992) FASB paneldebates need for environmental-related accounting rules,Securities Regulation and Law Report 24(5), 156.

Chemical Manufacturers Association (CMA) (1991) Respon-sible Care: Progress Report. Washington, DC.

Cooper, W., and Ijiri, Y. (1983) Kohler’s Dictionary forAccountants, 6th edn, Prentice-Hall, Englewood Cliffs,NJ.

Emergency Planning and Community Right to Know Act(1986) (42 USC 11001 to 11050).

Financial Accounting Standards Board (FASB) (1975) State-ment of Financial Accounting Standards No. 5: Accounting forContingencies, FASB, Stanford, CT.

Financial Accounting Standards Board (FASB) (1978) State-ment of Financial Accounting Concepts No. 1: Objectives ofFinancial Reporting by Business Enterprises, FASB, Stamford,CT.

Freedman, M. and Jaggi, B. (1982) Pollution disclosures,pollution performance and economic performance,The International Journal of Management Science, 10(23),167–176.

Freedman, M. and Jaggi, B. (1986) An analysis of the impactof corporate pollution disclosures included in annualfinancial statements on investors’ decisions, Advances inPublic Interest Accounting, 1, 193–212.

Freedman, M. and Wasley, C. (1990) The associationbetween environmental performance and environmentaldisclosure in annual reports and 10-Ks, Advances in PublicInterest Accounting, 3, 183–193.

Harris, P. (1991) Chemical industry lauds ‘responsible caregoals’, Environment Today, April, 3.

Hillison, W., Jordan, W. and Pogach, K. (1989) Accountingissues of underground injection of waste, Journal ofAccounting and Public Policy, 8, 219–234.

Ingram, R. and Frazier, K. (1980) Environmental perform-ance and corporate disclosures, Journal of AccountingResearch, 18, 614–622.

Jensen, R. (1977) Studies in Accounting Research 14. Phan-tasmorgic Accounting: Research and Analysis of Economic,Social, and Environmental Impact of Corporate Business,American Accounting Association, Sarasota, FL.

Lessem, R. (1977) Corporate social reporting in action: anevaluation of British, European and American practice,Accounting, Organizations and Society, 2(2), 279–294.

Ramanathan, K. (1976) Toward a theory of corporate socialaccounting, The Accounting Review, 51, 516–528.

Reporters Committee for Freedom of the Press. (1987) Howto Use the Federal FOI Act, The FOI Service Center,Washington, DC.

Rockness, J. (1985) An assessment of the relationshipbetween US corporate environmental performance anddisclosure, Journal of Business Finance and Accounting,12(3), 339–354.

Rockness, J., Schlachter, J. and Rockness, H. (1986) Hazard-ous waste disposal. Corporate disclosure, and financialperformance in the chemical industry, Advances in PublicInterest Accounting, 1, 167–191.

Solomons, D. (1986) Making Accounting Policy: the Quest forCredibility in Financial Reporting, Oxford University Press,New York.

Watts, R. and Zimmerman, J. (1986) Positive AccountingTheory, Prentice-Hall, Englewood Cliffs, NJ.

Wiseman, J. (1982) An evaluation of environmental disclo-sures made in corporate annual reports, Accounting,Organizations and Society, 7, 53–63.

BIOGRAPHY

Sarah D. StanwickAuburn University345 College of BusinessSchool of AccountancyAuburn, AL 36849-5247USAPhone: (334) 844-6205Fax: (334) 844-5875E-mail address: [email protected]




Peter A. StanwickAuburn University440 College of BusinessDepartment of ManagementAuburn, AL 36849-5241

USAPhone: (334) 844-6517Fax: (334) 844-5159Email address: [email protected]




a descriptive analysis of environmental disclosures: a study of the us chemical industry

Documents