Environmental Information in Annual Reports A Survey of Swedish Accountants

Managerial Auditing Journal
Environmental information in annual reports: a survey of Swedish accountants

Siv Nyquist
Article information:
To cite this document:
Siv Nyquist, (2003),"Environmental information in annual reports: a survey of Swedish accountants", Managerial Auditing
Journal, Vol. 18 Iss 8 pp. 682 - 691
Permanent link to this document:
http://dx.doi.org/10.1108/02686900310495935
Downloaded on: 06 September 2016, At: 20:50 (PT)
References: this document contains references to 27 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 1318 times since 2006*
Downloaded by Universitas Kristen Satya Wacana At 20:50 06 September 2016 (PT)
Users who downloaded this article also downloaded:

(1997),"Environmental accounting - what does it mean to professional accountants?", Accounting, Auditing &
Accountability Journal, Vol. 10 Iss 4 pp. 594-600 http://dx.doi.org/10.1108/09513579710180833
(2013),"Environmental management and regulation: pitfalls of environmental accounting?", Management of Environmental
Quality: An International Journal, Vol. 24 Iss 4 pp. 538-554 http://dx.doi.org/10.1108/MEQ-04-2012-0027
(2011),"Perceptions of corporate social and environmental accounting and reporting practices from accountants in
Bangladesh", Social Responsibility Journal, Vol. 7 Iss 4 pp. 649-664 http://dx.doi.org/10.1108/17471111111175191
Access to this document was granted through an Emerald subscription provided by emerald-srm:602780 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please
visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com

Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of
more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online
products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication
Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.
*Related content and download information correct at time of download.
Environmental information in annual reports: a survey

of Swedish accountants
Siv Nyquist
Department of Law, Umea University, Umea, Sweden
Keywords
Accountants, Public accounting,

Surveys,
Environmental management,
Administrative data processing,
Sweden
Abstract
This paper presents an

investigation of how the new
demands for auditing
environmental information in the
administrative reports are
perceived by Swedish
accountants. Responses from 123
surveyed authorized public
accountants show that they have
a positive attitude towards
environmental information. The
accountants demand additional
training and they believe that the
amount of environmental
information companies present is
going to increase in the future, or
at least not decrease. The survey
results are analyzed from the basis
of two perspectives: large auditing
firms have better resources to
educate, guide and train their
employees than small auditing
firms; and accountants with
experiences in auditing
environmental information have
more training and a different
attitude towards environmental
information compared to
accountants with no experiences.
Whether or not accountants have
received any special training
differs significantly between
accountants with experience from
auditing environmental
information, and those with none.

18/8 [2003] 682-691
# MCB UP Limited
[ISSN 0268-6902]
[DOI 10.1108/02686900310495935]
[ 682 ]
This paper presents an investigation of how

the new demands for auditing environmental
information are perceived by Swedish
accountants. New Swedish legislation, acting
from 1 January 1999, requires information in
the companies' administration report
regarding the impact of business activity on
the natural environment. The companies'
public accountants audit the annual report
and consequently also the environmental
information in the administration report.
The administration report must, according
to the overall statement in the Annual
rsredovisningslagen, 1995, 1554;
Accounts (A
RL), present a true and fair
6 kap 1, 1st, A
view of the progress of company activity,
financial position, and economic result.
Furthermore, the administration report must
provide additional information not reported
in the balance sheet, income statement, or in
the notes. The new legislation is an addition
to the Annual Accounts Act and affects
companies that have a license to operate or
an obligation to report according to the
Swedish Environmental Code (Miljobalken,
1998, 808). The legislation and the detailed
specification in a statement from the Swedish
Accounting Standards Board (BFN, 1998),
aims to improve financial information
related to the environmental impact of the
companies' activities (Proposition 1996/97,
Vol. 167, p. 13).
The required environmental information
comprises company activity in Sweden and
shall contain reports on activities stated in
the license/obligation. The companies must
also report on the importance of on the
license/obligation for their operation. This
can be done by showing the proportion of the
business turnover or production that
depends on the license/obligation.
Companies that have a license to operate
must also report if they have to renew or
review their license. Such companies must
also report if the environmental impacts are

mainly emissions to water, air, or ground, or
waste/noise. Prospective injunctions of
importance must also be commented.
The Swedish Companies Act
(Aktiebolagslagen, 1975, 10 kap 11)
prescribes that a company's balance sheet,
income statement, notes, and administration
report must be audited by at least one public
accountant. Furthermore, a company that
has assets with a value exceeding 38,000,000
SEK, or has more than 200 employees, or is
listed at the stock exchange must have at
least one authorized public accountant. The
accountant's obligation is, according to
Companies Act 10 kap 3, to audit the
company's financial statement as well as the
board of director's and the president's
administration to ensure that the statement
is correct and reliable and that the
administration, has been managed properly.
This obligation shall be carried out according
to generally accepted auditing standards
(Accountants Act, Revisionslagen, 1995, 528,
14). These standards are detailed in
recommendations and statements from the
standard setting body FAR (the Swedish
Association of Accountants).
FAR has stated that an accountant must
through additional training maintain and
develop professional skills (FAR, 2001a,
p. 1009). However, it has been stressed that
financial accountants do not always have
adequate training to be able to audit
environmental information (Giertz and
Larsson, 1997; Medley, 1997). Accountants
may therefore have to cooperate with experts
and advisers from other disciplines (FEE,
1995; Larsson, 1998).
Since the accountants' assignments are to
ensure that the information in the annual
report gives a ``true and fair view'' of the
company's environmental impact, it is
important to investigate the accountants'
experience, training, and attitude (see
Kamp-Roelands, 1999, about auditing and
The Emerald Research Register for this journal is available at

http://www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is available at
http://www.emeraldinsight.com/0268-6902.htm
Introduction
Siv Nyquist
Environmental information in
annual reports: a survey of
Swedish accountants

18/8 [2003] 682-691
expectations gap). The present study aims to

shed some light on:
.
accountants' opinion about
administrative report;
.
accountants' training and preparation for
this new type of information; and
.
accountants' opinion of the importance
and the progress of environmental
information.
The results are analyzed from two
perspectives. First, large auditing firms may
have better resources to educate, train, and
guide their employees than small auditing
firms. How well they are prepared to meet the
new audit demands, and their attitude
towards the environmental information in
the administrative report, may therefore be a
function of the size of the accountancy firm. I
analyze whether or not there is a significant
difference between accountants at the ``Big
five'' firms and other firms. ``Big five''
comprises Arthur Andersen & Co, Deloitte
& Touche, Ernst & Young, KPMG, and
Pricewaterhouse & Coopers. Second,
accountants with experience in auditing
administrative report may have a different
attitude towards the new demand than other
accountants, perhaps due to different
background. The responses are therefore
analyzed to see if there are any significant
differences between the group with
experience from auditing environmental
information and the group with no
experience.
The survey focuses on authorized public
accountants, because this group audits large
companies and companies traded at the stock
exchange in Sweden, Stockholmsborsen.
Such companies may also be those that most
often need a license to operate or have an
obligation to report according to the
environmental code. As a consequence, the
authorized public accountants more often
come across administrative reports with
environmental information than other public
accountants. It is therefore of interest to
investigate this occupational group's opinion
in the matter.
Although this study focuses on Swedish
authorized public accountants, the issues
and the results are of general importance and
are relevant when statutory requirements on
environmental information in annual reports
are discussed. So far only a few countries
require environmental information in
companies' annual reports, but some
countries are discussing an introduction of
this requirement. The European Commission
has in a recommendation discussed how
environmental issues shall be recognized,

measured, and disclosed in companies'
annual accounts and annual reports
(European Commission, 2001). This
recommendation is new and there exists no
experience on how this recommendation will
be implemented in countries' national
legislation.
The paper is organized as follows. The next
section presents a review of the literature
concerning accountants, environmental
information, and the new Swedish
legislation. The following section discusses
the research method, followed by a section
where the results are presented. The paper
ends with analysis and conclusions.
Literature
This is the first Swedish study of financial
accountants' attitudes and preparedness for
auditing environmental information. There
are some studies about accountants'
involvement in companies' environmental
reporting in other countries. Gray et al. (1993,
pp. 13, 313-16) report about studies made in
Canada, New Zealand and the UK and
conclude that accountants are rarely
involved in improvement of the firms'
environmental matters. Similar results were
found in an Australian survey reported in
Wilmshurst and Frost (2001). A survey of UK
accountants' attitudes towards the
environmental agenda is presented in
Bebbington et al. (1994). Their survey focused
on accountants' attitude and involvement in
company's environmental accounting. They
found ``that accountants as a whole are
ill-equipped to respond to new challenges''.
This finding supports a similar proposition
in Power (1991). See also the discussions in
Lee (1989) and Power (1997).
Collison (1996) carried out ten interviews
with practitioners in the UK, focusing on the
experience and opinion of financial auditors.
The respondents were divided into two
groups practitioners working in large and
small audit firms. Some of the results from
these interviews are of significant interest
for this paper. For example, there seems to be
a growing importance of environmental
awareness in the auditors' work and the
respondents also found educational
initiatives useful. Accountants in the larger
auditing firms are also claiming that the
raising general awareness lead to the
involvement of environmental specialists
when needed.
Collison's (1996) investigation was followed
by a larger questionnaire survey about the
relevance of environmental issues for
[ 683 ]
Siv Nyquist
Swedish accountants

18/8 [2003] 682-691
[ 684 ]
auditors in the UK, presented in Collison and

Gray (1997). They investigated the auditors'
experience of and response to environmental
issues. The respondents were divided into
different groups, accountants working in
large auditing firms, the ``Big six'' auditing
firms, multi-partners, and sole practitioners.
The study found a positive association
between audit firm size and the respondents'
level of experience of, as well as expertise in,
environmental issues. There was also a
positive association between firm size and
the statement that auditors' awareness needs
to be raised.
FAR has in a statement discussed
accountants' consideration of environmental
issues when auditing the annual report
(FAR, 2001b, pp. 1156-8). It is pointed out that
the managers of the company have the
responsibility to make sure that the
company's activity is not violating any laws
or decrees. This includes the control of
environmental issues. The accountants'
objective is to plan and effect the audition of
the annual report in accordance with
generally accepted auditing standards and
basic auditing principles, for instance
regarding completeness, materiality, and
risk. Materiality for environmental issues is,
according to the statement by FAR (2001b),
the statutory information in the
administrative report and the issues that
have a material economical impact. FAR
(2001b) states that one part of audit planning
is to obtain general knowledge about
environmental legislation and decrees that
are of importance for the company's
environmental issues. The audit shall
guarantee that the environmental
information in the administration report
fulfills the requirements in the legislation.
FAI (2001b) has also given recommendations
on how an accountant may evaluate
information provided by environmental
experts.
A few Swedish handbooks have been
written that aim to help and support the
accountants that are auditing environmental
information (see Flening, 1999; Larsson,
1999). Other books have taken a wider
perspective and discuss the firms'
environmental responsibility, the
importance of information, and the
development of environmental reports (see
e.g. Boman et al., 1999; Westermark, 1999).
The auditor and consultant firm Deloitte
& Touche (200) studied 23 Swedish companies
regarding their environmental, ethical, and
social business consideration. The
investigation found that only a few of the
investigated companies left clear and
comprehensive enviromnental information,
RL. No
according to the prescriptions in the A
analysis of the results were made in the
report, but one explanation of the imperfect
information in the administration reports
may be the fact that this was the first year the
companies had to present environmental
information in the reports. The accountants'
expertise was naturally also limited, but as
FAR (2001b, p. 1158) notes:
The accountants auditing shall guarantee
that the environmental information in the
RL's
administration report comply with A
demands (translation).
Research method
The views of authorized public accountants
were surveyed by using a mail questionnaire.
The respondents were mailed a
questionnaire, a covering letter, and a
prepaid return envelope. A copy of the
questionnaire is available from the author.
The survey was carried out in January and
February 2002.
Questionnaire design
In designing the questionnaire, comments

and feedback from colleagues were obtained
to ensure that the questions were clear and
precise. The first part of the questionnaire
concerned some background variables in
order to obtain a profile of the respondents.
The following part focused on the auditors'
view of environmental information.
Sample frame and respondents
There were 2,326 authorized public

accountants registered in January 2002 at the
Swedish Supervisory Board of Public
Accountants (Revisorsnadmnden). When
deleting accountants working in other
countries, 2,314 registered accountants
remained. A total of 328 were randomly
selected and sent a questionnaire. After nine
days, reminders with a new questionnaire
were sent to non-respondents. A total of 128
responses were received. Of these, three
responded that they had retired, one refused
to answer the questionnaire, and one
questionnaire was returned-to-sender. There
are 123 usable responses, i.e. a response rate
of 38 per cent. Table I provides a summary of
the response rate and some additional
details.
Comparing the non-respondents and the

respondents.
As can be seen in Table I, the response rates

were approximately the same for the group
working at the ``Big five'' auditing firms and
the group working in small auditing firms.
The Fisher's exact test gave a p-value of 1,000.
Siv Nyquist
Swedish accountants

18/8 [2003] 682-691
The male response rate, 39 per cent, was

slightly higher than the female response rate,
31 per cent, but no significant difference in
response rate was found according to the
Fisher's exact test.
After four weeks the reminder, ten
accountants from the non-respondents group,
were interviewed over the telephone. The,
randomly selected, non-respondents were
asked if they had audited environmental
information, if they had received any special
training in auditing environmental
information and if they desired some
training in the matter. Additional
background questions were also asked.
Comparisons of the responses from the mail
questionnaire and the telephone interviews
Table I
Response rate and demographic details
Questionnaires sent
Usable responses
Gender
Male
Response rate (250 in the sample)
Female
Fisher's exact test p = 0.175
Work
Working at ``Big five''a
Working at other auditing firms
Have audit experience
Mail responses
Telephone responses
Have audit experience and work at ``Big five''
Number
328
123
14
38
100
81
39
19
31
23
75
47
62
38
38
37
80
5
65
50
56
70
Got special training

Mail responses
Telephone responses
38
2
31
20
Ask for training

Mail responses
Telephone responses
86
3
70
33
Median
49
14
16
2
Min/max
31/66
1/34
1/500
Median age
Median years of experience as an authorized public accountant
Median number of employees at the office
Personal interest in environmental issuesb
Notes: a Arthur Andersen & Co., Deloitte & Touche, Ernst & Young, KPMG,
Pricewaterhouse Coopers; b Scale 1 to 5; 1 = not interested; 2 = some interest; 5 =
very interested
are found in Table I. No significant

differences between the two groups were
found. A rather low p-value was found when
comparing responses concerning preferences
for training. A total of nine of the
telephone-interviewed accountants answered
the question. Still, systematic differences are
unlikely between the respondent and
non-respondent group concerning attitude
towards training.
Results
The results of the survey are presented in
Tables II -IX. The tables are organised in the
same way. Total numbers of responses are
presented first, then responses presented
with respect to the variables: ``working at Big
five/working at other auditing flims'' and
``have audited environmental
information/have not audited environmental
information''. The null-hypotheses of no
differences between the reporting groups are
tested by using the Fisher's exact test or the
2 test. Fisher's exact test is used in cases
where expected counts are too small to
provide a reliable 2 test. The p-values from
the tests are also reported in the Tables.
General finding
There are no particular differences between

males' and females' responses. Therefore
data for each gender are not reported. As can
be seen in Table I, 70 per cent of those that
have experience from auditing
administrative report are employed at the
``Big five'' firms. The Fisher's exact test gives
a p-value of 0.012, indicating that a larger
number of respondents with experience are
working at the ``Big five'' auditing firms than
would be expected if no association would be
present. This result is an important starting
point for the subsequent analysis.
Opinions about environmental information
In order to investigate auditors' attitudes

toward the new regulation, they were asked
whether or not they agree to six given
statements (see Table II). More than half of
the respondents, 51 per cent, claim that they
are positive that environmental information
is regarded and specially treated in the
report. Many are also claiming that
environmental information contributes to a
better overall picture of the company.
Of the respondents, 29 per cent claim that
they are not reflecting on the new regulation
since it is one regulation/law among many
others that has to be considered. Only a few
claim that environmental information is not
[ 685 ]
Siv Nyquist
Swedish accountants
18/8 [2003] 682-691
Table II
Responses to question 6: What is your opinion about the new regulation concerning
environmental information in the administration report? Each respondent is allowed to mark
more than one statement
No.
SD
Big five
Other firms
Audit
env. inf.
Not audit
env. inf.
I think it is good that environmental information is regarded and specially treated in the administration report
65
51 4.5
43
57
22
48
46
58
19
Fisher's exact test
p = 0.357
p = 0.187
I do not specially reflect on this since this is just one regulation/law of many that has to be considered
36
29 4.1
19
25
17
36
21
26
15
Fisher's exact test
p = 0.223
p = 0.406
I do not think that environmental issues are so important that they need special treatment
3
2 1.3
3
4
0
0
3
4
0
Fisher's exact test
p = 0.286
p = 0.551
This law does not add any new information since companies have, when needed, reported on environmental
issues in their annual reports even before this new legislation
2
2 1.3
1
1
1
2
1
1
1
Fisher's exact test
p = 1.000
p = 1.000
Environmental information contributes to a better general picture of the company
51
42 4.5
33
43
18
38
34
43
17
Fisher's exact test
p = 0.707
p = 0.848
Other opinion
5
4 1.8
4
5
1
2
4
5
1
Fisher's exact test
p = 0.648
p = 0.657
%
44
35
0
2
40
2
Note: SD = Standard deviation

Table III
Responses to question 7: What is your attitude to, that you as an auditor, shall audit the
environmental information in the administration report that companies with a license to operate
or an obligation to report leave? Each respondent is allowed to mark more than one statement
No.
SD*
Big five
Other firms
Audit
env. inf.
It is no problem for me to audit this information in the administrative report

39
32 4.2
29
38
10
21
26
33
Fisher's exact test
p = 0.072
p =
The audit obligation should not include environmental information in the administrative report
25
20 3.6
14
18
11
23
20
25
Fisher's exact test
p = 0.501
p =
Special competence is required to obtain, e.g. an independent special educated auditor
35
29 4.1
23
30
12
26
18
23
Fisher's exact test
p = 0.682
p =
My education as an accountant should have contained more studies of environmental issues
31
25 3.9
15
20
16
34
21
26
Fisher's exact test
p = 0.090
p =
Other opinion
7
6 2.2
5
7
2
4
4
5
Fisher's exact test
p = 0.707
p =
so important that a special regulation is
necessary or that the new regulation does not
add any new information that would not have
been reported without the regulation.
However, the respondents seem to be more
disparate regarding attitudes towards
auditing environmental information (see
Table III). A total of 32 per cent claim that
auditing environmental information
presents no particular problem and 29 per
[ 686 ]
Not audit
env. inf.
13
0.841
30
12
40
10
0.829
23
0.101
0.060
0.694
cent that it ought to be specially qualified

auditors to obtain. Furthermore, 20 per cent
answered that audit obligations should not
include environmental information and 25
per cent claim that their accountants'
training should have contained more studies
of environmental issues.
A difference between the accountants that
are working in the ``Big five'' and those
working in other firms is indicated regarding
Siv Nyquist
Swedish accountants
Table IV
Responses to question 8: Have you received any special training on how you shall audit this new
type of environmental information in the administration report?

18/8 [2003] 682-691
No
Yes
Fisher's exact test
Less than one day
One to three days
More than three days
No.
SD
Big five
84
38
69
31
4.2
4.2
47
28
28
9
1
74
24
3
21
6
1
Other firms
63
37
37
10
p = 0.073
75
7
21
3
4
0
Audit
env. inf.
79
21
46
33
70
30
0
23
9
1
Not audit
env. inf.
58
38
42
5
p = 0.000
70
5
27
0
3
0
%
88
12
100
0
0
Table V
Responses to question 9: Do you think that you are in need of some or further training because
of the fact that the environmental information shall be audited?
No.
SD
Big five
Other firms
Audit
env. inf.
Not audit
env. inf.
Yes
86
70 4.1
49
65
37
79
59
74
27
No
37
30 4.1
27
35
10
21
21
26
16
Fisher's exact test
p = 0.109
p = 0.222
No, I know enought already about how the new legislation works and how as an accountant I am affected
14
38
11
41
3
30
10
48
4
No, I am never going to audit this type of company and therefore need no special training
7
19
3
11
4
40
0
0
7
No, other reason
16
43
13
48
3
30
11
52
5
%
63
37
25
44
31

Table VI
Responses to question 10: How important do you think the new environmental information in
the administrative report is for stakeholders' ability to make a correct assessment of the
company?
No importance
Some importance
Importance
Rather large
importance
Very important
2 test
p-value*
No.
SD
Big five
Other firms
Audit
env. inf.
Not audit
env. inf.
1
43
54
19
1
36
45
6
0.9
4.3
4.5
3.3
0
29
36
10
0
38
48
13
1
14
18
9
2
31
40
20
1
21
34
12
1
40
43
15
0
12
20
7
0
28
48
17
1.5
Notes: * p-value is not significant at 5 per cent level. However, several cells have expected counts less than five
making p-value unreliable; SD = Standard deviation
the statement: `Ìt is no problem for me to

audit this information in the administrative
report''. This suggests that those working in
larger auditing firms might be more
comfortable with the new legislation
demands than other accountants. No
significant difference is found between those
accountants that have audited companies
with environmental information and those

that have not.
It also indicated a difference between those
that have and those that do not have audit
experience regarding the statement: ``Special
competence is required to obtain . . .''. Those
that have no experience claim to a higher
extent, than those that already have some
[ 687 ]
Siv Nyquist
Swedish accountants
18/8 [2003] 682-691
Table VII
Responses to question 11: Do you think that the environmental information from, e.g. special
environmental reports that companies often are providing is going to decrease/increase in
extent?
Decrease in extent
Stay the same
Increase in extent
2 test
p-value*
No.
SD
Big five
Other firms
Audit
env. inf.
Not audit
env. inf.
3
32
87
3
26
71
1.5
4.0
4.1
2
22
51
3
29
68
1
10
36
2
21
77
2
18
59
2
23
75
1
14
28
2
33
65
Note: * p-value is not significant at 5 per cent level. However, several cells have expected counts less than five
Table VIII
Responses to question 12: Do you think that public companies with information in their financial
statements and/or in special environmental reports about environmental issues are assessed
diferently than those companies that do not distribute this kind of information?
No.
SD
Big five
Other firms
Audit
env. inf.
Not audit
env. inf.
Companies that report environmental issues get a higher market value

43
35 4.3
31
41
12
26
30
38
13
21
Companies that report environmental issues are regarded as more creditworthy
11
9 2.6
5
7
6
13
6
7
5
11
External interest parties find that these companies are wasting economical resources when formulating,
compiling, and distpbutmg environmental information
1
1 0.9
1
1
0
0
1
1
0
0
External interest parties are assessing the companies equally, irrespective of whether they have environmental
information or not
40
33 4.3
25
33
15
33
28
35
12
29
Other opinion
27
22 3.8
14
18
13
28
15
19
12
29
2 test
p-value*
Note: p-value in not significant at 5 per cent level. However, several cells have expected counts less than five
Table IX
Responses to question 13: Do you think that the readers of your clients' entire annual report
get a correct picture of the companies' business environmental effect?
Yes, a correct picture

No, not a correct picture
Fisher's exact test
No.
SD*
Big five
78
38
67
33
4.3
4.3
49
26
experience, that they need support from

experts.
Special training
The auditors were asked if they had special

training about how environmental
information should be audited (see Table IV).
A majority, 69 per cent, answered that they
had no special training. Accountants
working in the ``Big five'' have, to a slightly
higher extent than the other group, some
special training regarding the new audit
obligation. There is strong evidence that
[ 688 ]
Other firms
65
29
35
12
p = 0.680
Audit
env. inf.
71
29
52
28
Not audit
env. inf.
65
26
35
10
p = 0.524
%
72
28
there is an association between training and

experience of auditing environmental
information. Data indicate that a larger
number of those that have got training also
have experience from auditing than would be
expected if no association would be present.
However, the proportion of accountants
without training is larger than the
proportion with training among those with
audit experience.
Among those that have some special
training, a majority, 74 per cent, claims that
the training was shorter than one day. On the
Siv Nyquist
Swedish accountants

18/8 [2003] 682-691
question if they would like any or additional

training on the matter, a majority (70 per
cent) claim that they need more training (see
Table V). It is interesting to notice that 74 per
cent of those that have audited companies
with environmental information in the
administrative reports, claim that they need
additional training. Among those that did not
need more training, a majority stated `òther
reason'' and claimed that specially trained
accountants inside their auditing firm could
assist them. A total of 38 per cent responded
that they already know enough about the
regulation and how they could be affected.
The importance of environmental

information
The respondents were asked how important

the new environmental information is for
stakeholders' ability to make a correct
assessment of the company. On a scale from
one to five, where one represented ``no
importance'' and five ``very important'', most
of the respondents thought that
administrative report is of ``some
importance'' or `ìmportance''. A total of 19
per cent claim that the information had a
rather large importance or was very
important (see Table VI).
The respondents were also asked about
their opinion concerning the usefulness of
companies' environmental reporting in the
financial statements, in the descriptive part
of the annual report, or in separate
environmental reports. A majority of the
respondents believed that environmental
reporting will increase in volume or at least
not decrease (see Table VII).
Many different opinions appear on the
question whether or not companies' with
environmental information are assessed
differently compared to the companies' that do
not include such reporting (see Table VIII). A
third, 33 per cent, stated that interested parties
assess companies independently of whether or
not environmental information is added.
Slightly more of the respondents believed that
companies with environmental information
obtained a higher market value. Among those
that stated `òther opinion'', most believe that
companies with environmental information are
regarded as ``more serious and credible'' and
that the information ``creates goodwill''.
Furthermore, only one of the respondents
believed that interested parties find
environmental information as a waste of money.
Finally, a majority of the accountants,
67 per cent, responded that environmental
information in the financial statement, in the
environmental report, or elsewhere in the
annual report, gives a correct picture of the
company's environmental impact (see

Table IX). Among those that did not think
that the environmental information gave a
correct picture nearly all argued that the
information is too limited.
Analysis
The new Swedish regulation that prescribes
companies to report on environmental issues
in the administrative report seems to be
positively received by the auditors. As can be
seen in Table II, more than half of the
respondents are positive towards special
treatment of environmental information in the
administrative report. Many accountants also
found that environmental information
contributes to a better overall picture of the
company. There were no significant
differences between the investigated groups:
working at ``Big five''/other firms or audit
experience/no experience. A slightly more
reserved attitude can be noticed when it comes
to the issue of auditing environmental
information. Accountants working in larger
firms more often find that auditing
environmental information causes no
particular problem. There is also an indication
that people without experience from
environmental auditing feel that help from
specialists should be at hand. Those
indications may be explained by the fact that
within the organization of larger auditing
firms there are special auditors that can
handle environmental issues. Accountants
with experience from auditing environmental
information are often working at the ``Big five''
firms. Even if these results are not statistically
significant, it is reasonable to assume that
accountants with experiences from the new
auditing obligation also are those that easily
can obtain assistance from special auditors.
An interesting picture appears when the
question about the accountants' training is
analyzed. Accountants' obligation to audit
environmental information has not
automatically preceded by special training.
Less than a third had received any particular
training in the subject. The ``Big five'' auditing
firms have provided their employees with
training to a larger extent than accountants
working in other firms. The training is less
than one day in the majority of the cases.
It is striking that 58 per cent of those with
audit experience have no special training. A
majority of the respondents, 70 per cent,
would like additional training. This result is
independent of accountants' training in the
matter, experience from auditing
environmental information, how many that
are working at the same office as the
[ 689 ]
Siv Nyquist
Swedish accountants
18/8 [2003] 682-691
respondent, or the size of the auditing firm.

The demand among accountants for
additional environmental training is very
strong, indeed.
The level of `ènvironmental'' knowledge
among accountants and the importance of
enhancing this knowledge is often discussed.
Medley (1997) claims that:
Although the awareness of environmental

issues has increased among accountants, it is
necessary to enhance their knowledge by
establishing formalized training programs.
Bebbington et al. (1994) wonder:
. . . whether the selection and training process

of accountants are, . . ., a homogenizing
influence that largely overrides earlier
education influence and leaves accountants
ill-equipped to respond to changes.
Gierz and Larsson (1997) claim that accountants

need more competence in environmental issues
because it is more and more common to ask the
elected auditor for a signature on the not
statutory environmental report. The above
reported discussions refer to companies'
financial accountants and public accountants,
in a situation where auditing environmental
information is not legally required.
The new requirements in the Swedish
Annual Accounts Act ought to have been
followed by special training for the
accountants, or so one could argue. This would
at least be expected among those that audit
companies with environmental information.
One might argue that the awareness and
knowledge about environmental problems are
already sufficient among accountants; they
know how to audit this new obligation and to
ask for expert help when necessary. The
results in this study do not support this
implication, however.
Another implication is that environmental
information in the administrative report is
limited and rather uncomplicated to compile.
Therefore, auditing is not a complex task.
Perhaps the new legislation is pointless if those
that have the obligation to audit the
information need none or less than a half day of
training to learn and understand it. The results
from this study indicate that the accountants
themselves seem to think that the information
is important. It must also be stressed that an
authorized public accountant in Sweden must
have a university degree and is presumably
well-equipped to meet new challenges.
The authorized public accountants examined
in this survey are mainly positive towards the
environmental information companies present.
Accountants also seem to think that the
environmental information gives a correct
picture of the companies' environmental impact
and that the volume of environmental
information is going to increase.
[ 690 ]
The results in this study and the comparable

findings in Collison and Gray (1997) differ. The
two statements in their study ``the level of
experience with environmental issues'' and
``the respondents' strength of agreement that
auditors' environmental awareness needs to be
raised'' can to a certain extent be compared to
results in the present study. They found a
consistent association between firm size and
the responses to those statements. A similar
association is not found in the present study.
However, Collison and Gray (1997) divided the
size of the firms into ``Big six'', `òther large
firms'', and ``small firms'' and then focused on
the `òffice'' view; whereas this study used two
levels and focused on the accountants' personal
opinion. Collison and Gray (1997) also
discussed environmental issues in general and
not as a statutory demand on environmental
information as in my study. Besides the design
of the study, another difference is important to
notice. There are eight years between the
studies and some of the differences may be
owing to a higher environmental awareness in
general. However, only 10 per cent of the
respondents in the study presented in this
paper claim that they are ``rather'' or ``very
engaged'' in environmental issues.
Conclusions
The conclusions from this investigation
regarding the authorized public accountants'
attitudes and opinions towards the obligation to
audit the new legislation in the administrative
report can be summarized as follows:
.
the accountants have a positive attitude
towards environmental information;
.
they are asking for more training; and
.
they find that the amount of
environmental information companies
present may increase in the future.
Whether or not accountants have received
any special training differs significantly
between accountants with experience of
auditing environmental information and
those that have no experience.
The Swedish government has stated that
the reason for implementing legislation
about environmental information is that
disclosing the firms environmental work and
its effects helps the interests groups to drive
industry towards more environmentally
adjusted businesses (Proposition 1996/97:167,
p. 6). The environmental information has,
according to the government bill, so far been
incomplete and therefore made comparisons
difficult. Expanded environmental
information provides an improved basis for
assessing firms' economic progress and
development possibilities. The government
Siv Nyquist
Swedish accountants

18/8 [2003] 682-691
bill comments on the auditing of

environmental information and stresses that
this information is outside an accountant's
normal competence, but that it is a matter, of
course, that accountants' body completes its
competence in the subject (Proposition
1996/97:167, p. 15).
This study has shown that not all
accountants have been trained in
environmental issues. Not even all those that
audit environmental information in the
administrative report have had adequate
training. However, all of the ``Big five''
accounting firms have accountants that are
handling environmental auditing and serve as
experts. There are also public courses
in environmental information and reporting to
attend as well as literature in the matter.
The survey has given rise to several new and
additional questions. An important question is
what type of training the accountants require.
Another topic for further studies is how well
the disclosing of environmental information
helps to fulfill the government's sustainability
intentions. The accountants' part in the
progress seem from this study to be important.
Two questions in the survey, not yet analyzed,
dealt with environmental liabilities. The
answers to those questions, together with a
close look on accounting for liabilities and
environmental obligations, are interesting
objects for further research.
References
Aktiebolagslagen (1975:1385), Companies Act,

1975: 1385.
rsredovisningslagen (1995:1554), Annual
A
Accounts Act, 1995: 1554.
Bebbington, J., Gray, R., Thomson, I. and Walters,
D. (1994), `Àccountants' attitudes and
environmentally-sensitive accounting'',
Accounting and Business Research, Vol. 24
No. 94, pp. 109-20.
Bokforingsnamnden (BFN) (1998),
Miljoinformation i Forvaltningsberattelsen,
BFN U, Vol. 98 No. 2, Stockholm.
Bornan, M., Buisman, J. Gavelius, M. and
Jamttjahn, J. (1999), Miljoredovisning,
hrlings Pricewaterhouse Coopers,
O
Stockholm.
Collison, D. (1996), ``The response of statutory
financial auditors in the UK to environmental
issues: a descriptive and exploratory case
study'', British Accounting Review, Vol. 28,
No. 4, pp. 325-49.
Collison, D. and Gray, R. (1997), `Àuditors'
responses to emerging issues: a UK
perspective in the statutory financial auditor
and the environment'', International Journal
of Auditing, Vol. 1 No. 2, pp. 135-49.
Deloitte & Touche (2000), Miljorapportering 2000,
Deloitte & Touche, Stockholm.
European Commission (2001), Commission
Recommendation of 30 May 2001 on the
Recognition, Measurement and Disclosure of

Environmental Issues in the Annual Accounts
and Annual Reports of Companies, 2001/453/
EC, OJL 156 13.6.2001, Commission of the
European Communities,Brussels.
FAR (2001a), ``Regler till vagledning for
FAR-ledamoternas skyldighet att forja god
revisorssed'', FARs samlingsvolym, FAR
folag, Stockholm, pp. 1004-9.
FAR (2001b), ``Revisorns beaktande av miljofragor
vid granskning av arsredovisningen'', FARS
samlingsvolym, FAR folag, Stockholm,
pp. 1156-9
Federation des Experts Comptables Europeens
(FEEE) (1995), Environmental Accounting,
Reporting, and Auditing: Survey of Current
Activities and Developments within the
Accountancy Profession, FEEE, Brussels.
rsredovisningslagens
Flening, B. (1999), A
Miljokrav Hanbok for Revisorer och
Ekonomichteer, Ekerlids forlag, Stockholm.
Giertz, K.G. and Larsson, L.O. (1997),
``Miljoredovisning kraver utvidgad
revisorskompetens'', Balans, No. 8-9, pp. 30-2.
Gray, R. Bebbington, J. and Walters, D. (1993),
Accounting for the Environment, Paul
Chapman, London.
Kamp-Roelands, N. (1999), Audits of
Environmental Reports, Koninklijk
Nederlands Instittiut van
Registeraccountants (NWRA), Amsterdam.
Larsson, L.O. (1998), ``Sa deltar revisorerna I det
internationella arbetet med miljoredovisning
och miljorevision'', Balans, No. 2, pp. 24-5.
Larsson, L.O. (1999), Miljornformation och
Miljoredovisning. En Vagledning for Foretag
och Revisorer, KPMG, Stockholm.
Lee, T. (1989), `Èducation, practice and research
in accounting: gaps, closed loops, bridges, and
magic accounting'', Accounting and Business
Research, Vol. 19 No. 75, pp. 237-53.
Medley, P. (1997), `Ènvironmental accounting
what does it mean to professional
accountants?'', Accounting, Auditing &
Accountability Journal, Vol. 10 No.4, pp. 594-600.
Miljobalken, Environmental Code (1998), 808.
Power, M. (1991), `Àuditing and environmental
expertise: between protest and
professionalisation'', Accounting Auditing &
Accountability Journal, Vol. 4 No. 3, pp. 30-42.
Power, M. (1997), `Èxpertise and the construction
of relevance: accountants and environmental
audit'', Accounting, Organizations and
Society, Vol. 22 No. 2, pp. 123-46.
Proposition 1996/97:167 (1996), Miljoredovisning
och miljoinfomation i naringslivet,
(Governments Bill), Riksdagens
tryckeriexpedition, Stockholm.
Revisorslagen (1995), Accountants Act, 1995:528.
Westermark, C. (1999), Miljoredovisning
Kommunikation av Etik, Vision och
Ekonomi, Tholin & Larssons forlag, Goteborg.
Wilmshurst, T.D. and Frost, G.R. (2001), ``The role
of accounting and the accountant in the
environmental management system'',
Business Strategy and the Environment, Vol. 10
No. 3, pp. 135-47.
[ 691 ]
This article has been cited by:
1. Janice Bell and Zahirul HoqueChristina ChiangBusiness School, Auckland University of Technology, Auckland, New Zealand
Deryl NorthcottAccounting Department, Auckland University of Technology, Auckland, New Zealand. 2012. Financial
auditors and environmental matters: drivers of change to current practices. Journal of Accounting & Organizational Change
8:3, 340-363. [Abstract] [Full Text] [PDF]
2. Garry D. CarnegieRoger L. BurrittCentre for Accounting, Governance and Sustainability, University of South Australia,
Adelaide, Australia. 2012. Environmental performance accountability: planet, people, profits. Accounting, Auditing &
Accountability Journal 25:2, 370-405. [Abstract] [Full Text] [PDF]
3. Maria Krambia KapardisWatchaneeporn SetthasakkoThammasat Business School, Thammasat University, Bangkok,
Thailand. 2010. Barriers to the development of environmental management accounting. EuroMed Journal of Business 5:3,
315-331. [Abstract] [Full Text] [PDF]
4. Jalal M. AlattarDepartment of Accountancy, University of Qatar, Doha, Qatar Khalid AlKhaterDepartment of Accountancy,
University of Qatar, Doha, Qatar. 2008. An empirical investigation of users' views on corporate annual reports in Qatar.
International Journal of Commerce and Management 17:4, 312-325. [Abstract] [Full Text] [PDF]

Environmental Information in Annual Reports A Survey of Swedish Accountants

Enviado por

Dados do documento

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Environmental Information in Annual Reports A Survey of Swedish Accountants

Enviado por

Direitos autorais:

Formatos disponíveis

Managerial Auditing Journal