Academic journal article Journal of Legal, Ethical and Regulatory Issues

Accounting Majors' Perceptions of the Advantages and Disadvantages of Sustainability and Integrated Reporting

Academic journal article Journal of Legal, Ethical and Regulatory Issues

Accounting Majors' Perceptions of the Advantages and Disadvantages of Sustainability and Integrated Reporting

Article excerpt

INTRODUCTION

Sustainability reporting provides information about organizations' impact on natural resources, employees, and the community. This information may assist stakeholders in assessing organizations' long-term creation of value beyond the products and services they provide and the profit they generate. Some global companies combine sustainability reporting with financial reporting in one integrated or linked report.

In the U.S., sustainability and integrated reporting are largely voluntary. However, globally a trend toward mandatory reporting has emerged. Accounting professionals play an important role in supporting this trend and also likely will play a continually increasing role in the day-to-day compiling, analyzing, and reporting of unbiased relevant sustainability information. In addition, accounting professionals may play an increasing role in the planning and strategic implementation of sustainability-related activities. The American Institute of Certified Public Accountants (AICPA) views CPA's function with regards to sustainability accounting and reporting as follows: "Members in business, industry and government can add value within their organizations by serving in an integrative role in the value creation process, linking company strategy to sustainability, evaluating risks and opportunities, and providing measurement, accounting and reporting skills." (AICPA, n.d., n.p). opportunities, and providing measurement, accounting and reporting skills." (AICPA, n.d., n.p).

For the sustainability and integrated reporting trend to continue to thrive, companies must be willing to expend resources necessary for high-quality comparable reporting. Companies that decide to report on sustainability will tend to consider carefully the benefits and challenges of reporting. Accounting professionals provide important input regarding the reporting decisions and implementation. Accounting majors are the future accounting professionals and hence will be affected by sustainability reporting. If they are convinced that the benefits are consistent with their company's mission, they may be more inclined to support sustainability or integrated reporting. An earlier study (James, 2015) found that overall, accounting majors support sustainability reporting of environmental and social sustainability issues. Thus, their perceptions regarding the benefits and challenges of sustainability and integrated reporting are very important.

This study found that accounting majors tend to support integrated reporting for public companies and would support mandatory reporting. Accounting majors perceived that the most important advantages of sustainability reporting were the positive effects on the company's reputation, increased profit, and customer loyalty. Accounting majors perceived that the most important disadvantages were short-term reporting costs and concerns about the accuracy and completeness of the information. This study provides information regarding future accounting professionals' perceptions of the potential advantages and disadvantages of sustainability reporting which may affect their influence on and support of sustainability and integrated reporting and help shape their involvement with such activities.

BACKGROUND

The Brundtland Commission's definition of sustainability development (U.N., 1987, 41), which states that it is a "development that meets the needs of the present without compromising the ability of future generations to meet their own needs," is well-known and frequently cited in the literature. In the context of corporate sustainability, it generally relates to companies' ability to create value in the long-run while minimizing their negative impact on the environment, people, and natural resources. Thus, the term "sustainability" includes not only environmental issues such as clean air, water, and the preservation of natural resources; but also the wellbeing of companies' workforce, the community in which they operate, as well as their effect on other stakeholders. …

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