| This research seeks to further our understanding of the factors that influence decisions to accrue and disclose environmental liabilities by applying a model of rational decision making, the theory of planned behavior (Ajzen, 1991). It is motivated by the belief that accounting plays a key role in the accountability and transparency of organizations with respect to their environmental performance. Previous studies on environmental accounting have viewed the firm at the superorganic level, a macro-level perspective that focuses on the company as the unit of analysis. The present study investigates decisions to accrue and disclose environmental liabilities at the level of the individual decision maker. It hypothesizes that intentions to accrue and disclose environmental liabilities are based on attitudes, subjective norms, perceived behavioral control, and perceived moral obligation. Furthermore, the magnitude of environmental and financial consequences is believed to moderate the relationships between the determinants of intentions and the intentions. The study was based on a survey of randomly selected U.S. financial executives that are members of the Institute of Management Accountants.; The findings of this study indicate that the intentions to accrue and disclose environmental liabilities are significantly influenced by individual and social variables. The individual factors are attitudinal in nature, and are driven by underlying beliefs about the outcomes associated with accrual and disclosure of environmental liabilities. This study supports the contention that the accrual decision is influenced by executives' self-efficacy and perceived moral obligation to accrue. It suggests that individuals who perceive themselves to be in control of environmental liability accrual decisions, and who perceive a high ethical obligation to accrue, are most likely to do so. The results of this study also suggest that financial executives are influenced by social and contextual variables. Subjective norms played a significant role in influencing these decisions, especially when the specific referent groups were named. The magnitude of environmental and financial consequences also had an effect on accrual and disclosure intentions. Finally, the results of this study suggest that financial executives are more willing to accrue a material environmental liability than to disclose it in the notes to the financial statements. |
