Risk regulation, community pressure and the use of management accounting in managing climate change risk: Australian evidence

Kumarasiri, J and Gunasekarage, A 2017, 'Risk regulation, community pressure and the use of management accounting in managing climate change risk: Australian evidence', British Accounting Review, vol. 49, no. 1, pp. 25-38.


Document type: Journal Article
Collection: Journal Articles

Title Risk regulation, community pressure and the use of management accounting in managing climate change risk: Australian evidence
Author(s) Kumarasiri, J
Gunasekarage, A
Year 2017
Journal name British Accounting Review
Volume number 49
Issue number 1
Start page 25
End page 38
Total pages 14
Publisher Academic Press
Abstract This exploratory study is amongst the first to investigate how companies perceive the regulation of carbon emissions and the pressure exerted by the community in an environment characterised by risk and uncertainty. Semi-structured interviews were conducted among 39 executives who were directly involved in carbon emissions management in 18 large listed Australian companies. Consistent with Prospect Theory, we find that decision-makers are threat biased and are more likely to take immediate actions when climate change issues are framed as threats as opposed to opportunities. From the interview data, it is seen that managers use management accounting techniques as a risk management tool in mitigating risks associated climate change issues. Furthermore, this use of management accounting appears to be driven primarily by the protection of economic interests, regulatory pressure and reputational pressure. The study provides insights into how perceptions of climate change uncertainties and external pressure for disclosure of emissions information influence companies to use management accounting in managing climate change risk.
Subject Accounting, Auditing and Accountability not elsewhere classified
Keyword(s) Carbon emissions
Climate change
Management accounting
Risk management
DOI - identifier 10.1016/j.bar.2016.10.009
Copyright notice © 2016 Elsevier Ltd
ISSN 0890-8389
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