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Accounting and Analytical Support for Cost and Value Added Management: The Way to Sustainable Development

Author

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  • Oleh Sokil

    (Dmytro Motornyi Tavria State Agrotechnological University, Melitopol, Ukraine)

Abstract

Current trends of financial and non-financial reporting development lead to greater interconnection and intersection of accounting methods and means, which in turn will activate the analytical component. This ultimately leads to the organization of accounting and analytical support system for sustainable development. The purpose of the article is to confirm the scientific and practical hypothesis about theoretical and methodological ability of the Accounting Institute to solve the problem of information support for the implementation of the global (and national) sustainable development policy. This goal was achieved by accounting/analytical support and mathematical analysis of the quadratic correlation and regression dependence of the added value of enterprises on the size of social and environmental costs. First math analysis results indicate a reverse U-shaped curve, and indicates the following trend: firstly, insignificant increase social expenditures at the beginning lead to a rapid increase in the added value of enterprises (the growth rate of added value is larger than social expenditures), secondly, the moment comes, the accumulated social expenditures begin slow down the growth rate of value added of enterprises. Second analysis gives evidence of a U-shaped quadratic dependence of value added on environmental costs of enterprises. Analyzing the data of the correlation coefficient of micro and small enterprises, we can conclude that value added is significantly dependent on environmental costs. Less dependence can be seen in medium and large enterprises, but also sufficient. The analysis showed that social / environmental costs lead to an increase in the added value of the enterprise to varying degrees. At the same time, the integrated reporting formation mitigates the risks of enterprise value loss. Finally, the accounting method (reporting) is a tool for sustainable development. Integrated reporting should be formed and issued not only by larger enterprises, but also by medium and small companies. This ultimately leads to the sustainable development of the region, industry, country, etc.

Suggested Citation

  • Oleh Sokil, 2020. "Accounting and Analytical Support for Cost and Value Added Management: The Way to Sustainable Development," Oblik i finansi, Institute of Accounting and Finance, issue 1, pages 59-68, March.
    • Handle: RePEc:iaf:journl:y:2020:i:1:p:59-68
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    References listed on IDEAS

    as
    1. Stefan Schaltegger & Roger Burritt & Dimitar Zvezdov & Jacob Hörisch & Joanne Tingey-Holyoak, 2015. "Management Roles and Sustainability Information. Exploring Corporate Practice," Australian Accounting Review, CPA Australia, vol. 25(4), pages 328-345, December.
    2. Valeriy Zhuk, 2019. "Integrated Reporting: A Retrospective and Perspective in Ukraine," Oblik i finansi, Institute of Accounting and Finance, issue 1, pages 20-27, March.
    3. Christoph Trumpp & Thomas Guenther, 2017. "Too Little or too much? Exploring U‐shaped Relationships between Corporate Environmental Performance and Corporate Financial Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 26(1), pages 49-68, January.
    4. Schaltegger, Stefan & Burritt, Roger L., 2010. "Sustainability accounting for companies: Catchphrase or decision support for business leaders?," Journal of World Business, Elsevier, vol. 45(4), pages 375-384, October.
    5. Stefan Schaltegger, 2011. "Sustainability as a driver for corporate economic success," Society and Economy, Akadémiai Kiadó, Hungary, vol. 33(1), pages 15-28, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    integrated reporting; social/environmental costs; firm value added; quadratic correlation and regression analysis; sustainable development;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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