Corporate reporting and accounting for externalities. / Unerman, Jeffrey; Bebbington, Jan; O'Dwyer, Brendan.

In: Accounting and Business Research, Vol. 48, No. 5, 04.06.2018, p. 497-522.

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E-pub ahead of print

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  • Final accepted ABR Corporate reporting and accounting for externalities paper by Unerman Bebbington and ODwyer

    Accepted author manuscript, 555 KB, PDF-document

    Embargo ends: 4/12/19

Abstract

Externalities comprise economic, social and/or environmental impacts arising from the activities of an entity that are borne by others, at least in the short term. As they do not feedback directly into immediate financial consequences for the entity, they tend to be outside the remit of financial reporting. A dispersed academic accounting literature on externalities has hitherto developed separately from concerns about what information is appropriate to report on corporate performance. This paper develops insights into accounting for, and reporting of, externalities that are intended to improve the use of externalities information in breaking down silos between the traditionally discrete domains of financial reporting and sustainability reporting, and between silos within sustainability reporting. Challenges in such use of externalities information are explored, including difficulties inherent in quantification of externalities. The paper also highlights ways in which externalities can progressively become internalized, thereby bringing them more readily within the domain of economically-focused financial reporting practices. An agenda for further research to help enhance the accounting for, and reporting of, externalities is also proposed.
Original languageEnglish
Pages (from-to)497-522
Number of pages26
JournalAccounting and Business Research
Volume48
Issue number5
Early online date4 Jun 2018
DOIs
StateE-pub ahead of print - 4 Jun 2018
This open access research output is licenced under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

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