Full cost accounting:solid waste management practices in an Australian Regional Council

摘要

Over the past two decades, sustainability and waste management has surfaced as a global challenge (Laughlin and Varangu, 1991; Stern, 2007; ACCA, 2011). While attention has largely focused on external reporting and sustainability accounting (Gray, 2010; IIRC, 2013), less attention has been paid to the use of environmental management accounting techniques, such as Full Cost Accounting (FCA), in waste management practices (Bebbington and Thompson, 1996). FCA ensures social, environmental and economic impacts of waste are calculated and included in corporate accounts, reflecting the true price of goods and services from cradle to grave (Bebbington et al. 2001). Governments around the world have recommended municipal councils adopt FCA techniques when accounting for solid waste, however, little is known of the extent of its adoption and/or adaptation in practice (Qian and Burritt, 2007; Lim, 2011a; 2011b). Drawing on recent developments in the sustainability accounting literature, a theoretical FCA framework is developed and used to explore the social and institutional pressures that contribute to FCA accounting for solid waste. The framework is used to guide the exploration of sustainability accounting practices to manage solid waste in an Australian regional council. As the case site is globally recognised for its unique biodiversity, and operates within an Australian World Heritage site, considerable attention by this organisation’s stakeholders is given to the natural environment. An in-depth case study is conducted to provide a better understanding of the adoption of FCA in solid waste management. In particular, the study examines: The differences between normative FCA and actual solid waste management accounting practices. The barriers to implementing FCA within this regional council. The findings suggests that, while accounting for sustainability is visible throughout most of the organisation and is evident in council budgeting: a. The council is committed to FCA, but the FCA adopted at this stage is a simplified version. b. The accounting department is largely decoupled from FCA practices evident in other parts of the organisation, in particular, the environmental and waste management departments. c. The central barriers to adopting the normative FCA techniques include financial pressure, the absence of legal obligation and poor internalisation of sustainability accounting within operations. The findings indicate that, for FCA to advance to the management of solid waste, a substantial amount of accounting effort and infrastructure that includes a compact database for valuation purposes is required. However, the infrastructure development has commenced with guidance from Environmental Protection Agency (EPA) software, which, although a simplified model, will help legitimise the costs associated with diverting solid waste from landfill to recycling. This is essential, as the council needs to ensure there is transparency in accounting practices, so they can recover costs associated with the management of solid waste from the ratepayers.