Over the past 10 years, with Australia's urban population ,growth there has been an
increasing pressure on land, resource and waste management throughout the States and
Territories. Local government, one of the public sectors traditionally responsible for
waste services, is being required to take more environmental issues into account in
order to develop a sustainable community. The purpose of this study is to investigate
current practices of environmental accounting for local government...[Show more] waste management
and to explore possible explanations for these environmental accounting practices.
This study applies a mixed method design to achieve the research objectives, starting
with the case studies of 12 local councils in New South Wales (NSW) Australia, and
extending them to a mail survey of all councils in NSW. The case studies allow the
researcher to explore the practices of environmental accounting for waste management
in a real-life context. The case study findings indicate that contingency theory and
institutional theory are most likely to provide insightful explanations for current
environmental accounting practices in local government waste management.
Contingency theory views organisations as technically devised instruments aiming for
effective and efficient control of their work processes. Based on this theory,
environmental uncertainty, environmental strategy and task complexity are proposed as
explanatory variables. Institutional theory views organisations as social actors and the
"carriers" of social structures aiming for legitimacy from a wide range of social
institutions. Based on this theory, regulatory pressures, cognitive pressures, community
expectations, and inter-professional communication, are proposed as explanatory
variables. The mail survey assesses the effectiveness of the two theoretical explanations.
The results reveal that the use of environmental accounting in local government waste
management is generally moderate rather than little or none as previously suggested.
However, the variance in environmental accounting practices in local government waste
management is significant. When the scope of environmental accounting information
becomes broader, from direct to indirect, from internal to external, lower levels of
accounting are found. Among the local councils investigated, accounting for external
environmental costs and impacts in waste management has always drawn the least
attention. The assessment of theoretical explanations reveals that current environmental
accounting practices in local government waste management arc significantly driven by
proactive environmental strategics, complex waste operation tasks, a high level of interprofessional
communication, and uncertain waste management environments. Task
complexity, inter-professional communication, environmental uncertainty, community
expectations and environmental strategy are all significantly associated with the level of
direct waste flow and activity accounting. However, only environmental strategy, task
complexity and inter-professional communication, play a significant role in explaining
the levels of accounting for indirect/hidden and external costs and impacts in waste
management. It appears that community's environmental expectations and uncertain
waste management environments cannot provide a significant incentive for local
government to account for indirect/hidden and external environmental costs and impacts.
Two institutional factors, regulatory pressures and environmental cognitive pressures do
not significantly contribute to any aspect of environmental accounting practices in local
government waste management. When testing the effects of type and size of local
councils, it is found that urban councils have a significantly higher level of direct waste
flow and activity accounting than rural councils, but the differences in the levels of
indirect/hidden and external cost and impact accounting are not statistically significant.
Size of local councils does not explain any aspect of environmental accounting practices
in local government waste management.
The results of this thesis indicate that contingency theory provides better explanations
for environmental accounting practices in local government waste management than
institutional theory. The weaker role of institutional theory explanations implies that the
development and institutionalisation of environmental accounting for local government
waste management may take a longer time than expected. The explanations for current
development of environmental accounting are mainly related to pursuing efficiency and
effectiveness of working processes.
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