In the Pursuit of Environmental Sustainability: The Role of Environmental Accounting

Muhammad Faisal Majid, Muhammad Meraj and Muhammad Shujaat Mubarik
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Muhammad Faisal Majid: Department of Management Sciences, Faculty of Business Administration, Mohammad Ali Jinnah University, Karachi 75400, Pakistan
Muhammad Meraj: Department of Economics, Faculty of Social & Basic Sciences, Mohammad Ali Jinnah University, Karachi 75400, Pakistan
Muhammad Shujaat Mubarik: College of Business Management, Institute of Business Management, Karachi 75190, Pakistan

Sustainability, 2022, vol. 14, issue 11, 1-20

Abstract: This study aims to evaluate the mediating role of sustainability in the relationship between environmental-accounting (EA) disclosures and audit quality (AQ) and firm performance (FP) by using GDP and firm size as the controlled variables. Data were collected from the annual and sustainability reports of 80 manufacturing firms that were listed on the PSX during the last 10 years (2011–2020). STATA 13 software and a multiple-regression model were used. The findings that were deduced from the empirical results indicate that EA with sustainability has a significant negative effect on both proxies of the FP (ROA and ROE). By contrast, AQ with sustainability has an insignificant negative impact on firm performance. This research contributes to the scarce literature and compares the level of EA with sustainability reporting and its impact on the FP with the controlled variables GDP and firm size. This study also contributes to the execution of the reporting and the assurance of sustainability, and it helps regulatory bodies with the integral development of reporting and the assurance of EA.

Keywords: environmental accounting disclosures; sustainability; firm performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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