Environmental Management Accounting and Financial Perforjviance Case Study: Hima Cement Limited

ABSTRACT The study was about environmental management accounting and the perceived financial performance of the cement industry in Uganda. A comparative study of Hima cement limited (Uganda). The main objectives of the study were; i) To examine the relationship between environmental information and the perceived financial perfonnance in the cement industry in Uganda. ii) To examine the impact of compliance of enviromnental laws on perceived financial performance ofin cement industry in Uganda. iii) To examine the impact of compliance of enviromnental laws on perceived financial performance of in cement industry in Uganda. The research design took into account that involved observation and questionnaires that enabled to get both qualitative and quantitative data. The data was used for purposes of drawing valid conclusion Data collections methods were both primary and secondary sources. 123 were sampled from Hima cement limited (Uganda) and they expressed their views on the importance of enviromnental management accounting in the company. The findings from the primary data indicated the managers were aware of the impmtance of application of environmental management accounting and the need for compliance with the enviromnental laws, tracking of environmental cost saving, enviromnental evaluation and production of environmental information which are critical in improving the financial performance of the company. There are efforts to comply with environmental laws, reducing the costs by avoiding wastage and provide a healthy conducive environment to the workers and the society at large. The research recommended that all the stakeholders should be provided with infonnation about the activities of the company, environmental evaluation be carried out periodically, need to keep pace of the regulatory framework put in place by government and other regulatory bodies, and that it is necessary for businesses, investors and society to conveniently understand and track corporate holistic performance.

 TABLE OF CONTENT 

DECLARATION .............................................................................................................................. i 

APPROVAL ................................................................................................................................... ii 

ACKNOWLEDGEMENT ............................................................................................................. iii 

ABSTRACT ................................................................................................................................... iv 

LIST OFT ABLES ........................................................................................................................... v 

LIST OF FIGURES ........................................................................................................................ vi 

CHAPTER ONE ............................................................................................................................ 1 

1.0 INTRODUCTION ..................................................................................................................... 1 

I. 1 Background to the Study ........................................................................................................... 1 

1.2 Statement of the Problem .......................................................................................................... 3 

1.3 Purpose of the Study .................................................................................................................. 3 

1.4 Objectives of the Study .............................................................................................................. 3 

1.5 Research Questions .................................................................................................................... 4 

1.6 Significance of the Study .......................................................................................................... .4 

1.7 ScopeofStudy .......................................................................................................................... .4 

1.7.1 Geographical Scope ............................................................................................................... .4 

1.7.2 Content Scope ......................................................................................................................... 4 

1.7.3 Time scope .............................................................................................................................. 5 

1.8 Conceptual framework .............................................................................................................. 6 

CHAPTER TWO ........................................................................................................................... 8 

2.0 REVIEW OF RELATED LITERATURE ................................................................................. 8 

2.1 INTRODUCTION ..................................................................................................................... 8 

vii 

2.2 Environmental Management Accounting (EMA) ..................................................................... 8 

2.3 Conventional Management Accounting on Envirom11ental Issues ............................................ 9 

2.4 Producing Accounting Environmental Infonnation and Financial Performance .................... 10 

2.5 Compliance of Accounting Environmental Laws and Financial Performance ....................... 12 

2.6 Accounting Environmental Evaluation and Financial Perfonnance ....................................... 13 

2. 7 Tracking of Environmental Cost Savings and Financial Perfonnance .................................... 14 

2. 7 .1 Input/ Output Analysis .......................................................................................................... 15 

2.7.2 Enviromnental Activity-Based Accounting .......................................................................... 16 

2.7.3 Lifecycle Costing .................................................................................................................. 17 

2.8 Environmental Management Accounting and Financial Perfonnance .................................... 18 

CHAPTER THREE ..................................................................................................................... 20 

3.0 RESEARCH METHODOLOGY ............................................................................................ 20 

3.1 Introduction ............................................................................................................................. 20 

3.2 Research Design ...................................................................................................................... 20 

3.3 Study Population ...................................................................................................................... 20 

3 .4 Sample Size and Sampling Design .......................................................................................... 20 

3.5 Sampling techniques ................................................................................................................ 21 

3.5.1: Purposive sampling ............................................................................................................. 21 

3.6 Sources ofData ........................................................................................................................ 21 

3.6.1 Primary Data ......................................................................................................................... 21 

3.6.2 Secondary Data ..................................................................................................................... 21 

3.6.3 Data Collection Instrument. .................................................................................................. 21 

3.7 Measurement ofVariables ....................................................................................................... 22 

3.8 Validity and Reliability of Instruments ................................................................................... 22 

viii 

3.8.1 Validity test. .......................................................................................................................... 22 

3.8.2 Reliability test ....................................................................................................................... 23 

3.9 Data Analysis ........................................................................................................................... 23 

3.10 Anticipated Problems ............................................................................................................ 23 

CHAPTER FOUR ....................................................................................................................... 24 

4.0 DATA ANALYSIS AND PRESENTATION OF FINDINGS ............................................... 24 

4.1 Introduction ............................................................................................................................. 24 

4.2 Characteristics of the Sample .................................................................................................. 24 

4.2.1 Age ofRespondents .............................................................................................................. 24 

4.2.2 Gender ofRespondents ......................................................................................................... 26 

4.2.3 Level of Qualification ........................................................................................................... 27 

4.2.4 Expe1ience with the Company .............................................................................................. 28 

4.2.5 Operational Area ................................................................................................................... 29 

4.3 Constructs of EMA Application .............................................................................................. 30 

4.3.1 Environmental Infonnation .................................................................................................. 31 

4.3.2 Enviromnental Evaluation .................................................................................................... 32 

4.3.3 Compliance of Environmental Laws .................................................................................... 33 

4.3.4 Tracking Environmental Cost Savings ................................................................................. 34 

4.4 Perceived Financial Perfonnance ............................................................................................ 35 

CHAPTER FIVE ......................................................................................................................... 37 

5.0 DISCUSSIONS, CONCLUSSIONS AND RECOMMENDATIONS .................................... 37 

5.1 INTRODUCTION ................................................................................................................... 37 

5.2 DISCUSSION OF FINDINGS ................................................................................................ 37 

ix 

5.2.0 EMA Application Levels ...................................................................................................... 37 

5.2.lAccounting Environmental information ................................................................................ 37 

5.2.2Accounting Environmental Evaluation ................................................................................. 38 

5.2.3 Compliance of Accounting Environmental Laws ................................................................ 38 

5.2.4 Tracking ofEnviromnental Cost Savings ............................................................................. 39 

5.3.0 Levels of Perceived financial perfonnance ......................................................................... .40 

5.3. l Relationship between EMA Application and Perceived Financial Perfonnance ................ .40 

5 .3 .2 Relationship between Accounting Enviromnental Information and Perceived Financial 

Performance ................................................................................................................................... 40 

5.3.3 Relationship between Accounting Environmental Evaluation and Perceived Financial 

Perfonnance ................................................................................................................................... 41 

5 .3 .4 The impact of Compliance of accounting Environmental Laws on Perceived Financial 

Perfonnance ................................................................................................................................... 41 

5.3.5 The effect of Tracking of Environmental Cost Savings on Perceived Financial Performance 

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5.3.6 SUMMARY OF CONCLUSIONS ..................................................................................... .43 

5.4 RECOMMENDATIONS ......................................................................................................... 43 

5.5 AREAS OF FUTHER RESEARCH ....................................................................................... .44 

REFERENCES .............................................................................................................................. 45 

APPENDIX A ................................................................................................................................ 50 

APPENDIX B ................................................................................................................................ 58 

APPENDIX C ................................................................................................................................ 59