Citation

Conklin DW, Archibald TR. Ind. Environ. Crisis Q. 1993; 7(4): 319-332.

Copyright

(Copyright © 1993, Industrial Crisis Institute - Bucknell University)

DOI

10.1177/108602669300700404

PMID

unavailable

Abstract

Environmental legislation is creating additional corporate obligations, many of a crisis nature, and this requires a new body of accounting practices, which the authors refer to as crisis accounting. Environmental legislation and enforcement vary among jurisdictions, as do accounting practices. These differences may impact competitiveness and, consequently, trade and investment, and so they must be considered in com paring financial statements. Judicial decisions are also impacting the obligations of financial institutions and the terms of liability insurance. Estimates concerning these new risks and uncertainties must be included in corporate financial reporting, and it will be important to develop more uniform practices. Crisis accounting can assist crisis management, as well as provide more complete information to stakeholders. While still in its early stages, crisis accounting will likely develop along lines already pioneered in other subject areas where risk and uncertainty require that financial reporting involve estimates concerning potential outcomes.