Integration of Environmental Costs into Accounting Information System

Basman Mazahrih

Abstract

The purpose of this paper is to examine the extent to which Jordanian industrial companies listed in Amman Stock Exchange have integrated environmental costs into accounting information system. The study demonstrates the importance of integration in improving the stakeholders’ decision-making process regarding: the availability of environmental cost information, the companies’ commitment to implement environmental policies and procedures, and the disclosure of environmental cost information. To achieve the objectives of this research, the study employed a questionnaire survey method and a T-test to illustrate the impact of environmental cost information on stakeholders’ decision making. The study found that there were lacks of availability of environmental cost information, inappropriate of companies’ environmental commitment, and insufficient disclosed environmental cost information. This paper highlights the practical importance of environmental integration, which creates environmental awareness and environmental development to the dominant traditional cost accounting system. In conclude, the paper suggests that government and non-government accounting bodies can play an important role in developing the accounting information system to improve the decision-making process.