CHAPTER-3

RESEARCH METHODOLOGY
AND
REVIEW OF LITERATURE
 Chapter 3

RESEARCH METHODOLOGY AND

REVIEW OF LITERATURE

Meaning of Research

Types of Research

 Qualitative Research
 Quantitative Research
 Observational & Experimental Research
 Basic, Applied & Developmental Research

Characteristics of Research

Research Design

 General Structure and Writing Style

 Audit Research Design
 Case study design
 Casual design
 Cross sectional design

Objectives of the Study

Hypotheses

Scope of the Study

Research Methodology

Review of Literature

Research Gap

Limitations

References
Research Methodology and Review of Literature 54

MEANING OF RESEARCH
Research is a common expression used to pursue and gather for information
and knowledge. It is a scientific and systematic search tool for pertinent information
on a particular topic. In fact, it is an art of scientific investigation.

Research includes collection of data, information and facts for the

advancement of knowledge on any specific topic. It is basically series of steps used
to collect and analyze the data and information to extend our understanding of a
subject or issue. It consists of mainly 3 steps: raise a question, collect information
and data to answer the question, and find the solution of the problem. Redman and
Mory defines analysis as "systematized effort to gain knowledge."

TYPES OF RESEARCH
Qualitative Research: Understand the behavior of human being and also the
reasons responsible for such kind of behavior. Ask a broad question and compilation
of data and information in the form of words, images, video etc that is analyzed
searching for themes. Such kind of research aims to solve the question without
taking quantifiably variables into consideration or looking toward the potential
relationships between variables. It seems to be more restrictive in testing hypotheses
as it is costlier and time consuming, and usually restricted to single set of research
problems. This research is commonly used as a method for exploratory research as a
basis for later quantitative research hypotheses. Qualitative analysis is mainly
attached with the philosophical and theoretical stance of social constructionism.

Qualitative analysis is more subjective and seeks to explain or interpret any

matter being researched. This type of research provides information in the form of
words or pictures or other visual modes rather than numbers or data. It depends on
the researcher to look at, record and what happens, like participants' answers to
open-ended doubt, subjects' behavior or the results of experiments. Very common
examples of qualitative research are case studies.
Research Methodology and Review of Literature 55

Quantitative Research: It is a systematic and pragmatic investigation of

quantitative possessions and phenomena and their relationships. Asking a narrow
question and gathering numerical information to investigate, utilizing statistical
tools, the quantitative research technique are experimental, correlational, and survey
(or descriptive). Statistics derived from quantitative research may be used to build
the existence of associative or contributing relationships between variables. This
research is coupled with the philosophical and theoretical stance of positivism.

Observational and Experimental Research: It is a kind of research where no input

is taken from researcher or even information is gathered with any interference of
researcher. It is basically the examination of things in their natural or inherent
manner. The work of researcher is limited to observe, measure and record the data
and information occur naturally. That data and information then analyzed and used
to conclude the result.

This is in dissimilarity with experimental research, in which the parameters

or conditions are set by the researcher, which may be change by him to the effects
due to variation. Experimental research typically happens in laboratories however
will occur at any place. It simply needs the researcher to be control one or more
variable of the experiment. This methodology helps researchers to perceive how
different variables, aspects or conditions that can change, can have an effect on
experiment

Basic, Applied and Developmental Research: Basic research means the research
with the aim to reveal or discover the inherent truth. This kind of research involves
exploring that matter which is unknown or not understood. Applied research is
chosen in those matters which are already identified and looking out for ways to use
them, to solve the problem. Developmental Research is comparable to applied
research however focuses on using what is already identified to develop products or
existing technology or to make some thing new. Research project depends on the
appliance of the scientific methodology, a harnessing of curiosity. This type of
research provides scientific details, information and theories for the explanation of
the characteristic properties and nature of the world. It makes practical applications
Research Methodology and Review of Literature 56

achievable. Research project is generally funded by public authorities, by charitable

organizations and by big businesses houses. Scientific Research project further
divided into different sub groups depending upon their academic and application
disciplines. Scientific Research project is one of the main criteria in the judgment of
standing of an academic establishment; however some of the learned argue that such
criteria of judging an institute is not correct as research cannot confirm the standard
of teaching in an institute.

CHARACTERISTICS OF RESEARCH
The research problem should be cautiously selected. Some of the following
points must be taken care of before choosing research problem:
 The researcher should not take subject that is overdone.
 Controversial subject should be avoided.
 Too unclear or narrow problems should be avoided.
 The subject selected for research should be realistic.
 The subject selected for research should be familiar and materials related with
the subject should be easily available for further research.
 The selection of subject should be based on preliminary study.

RESEARCH DESIGN
A research design will typically include how data is to be collected, what
instruments will be employed, how the instruments will be used and the intended
means for analyzing data collected.

Before commencing research, researcher has to make a decision on plan to

design the research. The research design is defined as the overall approach that one
slects to amalgamate the different mechanisms of the study in a rational and logical
way that will effectively address the research problem, it consists the design for the
collection, measurement, and analysis of data.

General Structure and Writing Style

The function of a research design is to ensure that the evidence obtained
enables researcher to effectively address the research problem as explicitly as
Research Methodology and Review of Literature 57

feasible. In social research, obtaining evidence applicable to the research problem

entails specifying the type of evidence needed to test a theory, to appraise a
program, or to precisely portray a fact. Although research designs are multi-faceted
and prolonged but following things can be taken care of:
 Recognize the research problem well and give good reason for its selection.
 Evaluate previously published literature related with the problem area.
 Identify the hypotheses essential to the problem selected.
 Effectively illustrate the data which will be obligatory for an adequate test of
the hypotheses and enlighten how such data will be obtained.
 Express the techniques of examination which will be applied to the data in
determining whether or not the hypotheses are true or false.

Action Research Design

Action research planed to understand the characteristic series whereby
originally an exploratory stance is adopted, where an understanding of a problem is
developed and plans are made for some form of interventionary policy. Then the
intervention is carried out during which time, pertinent observations are collected in
various forms. The new interventional methods are done, and the cyclical method
repeats, continued till a level of sufficiency of understanding and information in
respect of issue is achieved. The protocol is iterative or repetitive in nature and is
meant to encourage deeper understanding of a given situation, beginning with
conceptualizing and particularizing the issue and moving through many
interventions and evaluations.

Case Study Design

A case study is an exhaustive study of a meticulous research problem more
willingly than a extensive statistical survey. It is often used to narrow down a very
wide-ranging ground of research into one or a few easily researchable examples. To
testify whether a specific theory and model actually applies to phenomena in the real
world, the case study research design is a very useful tool. Case study design
become very useful when not much is known about a phenomenon.
Research Methodology and Review of Literature 58

Causal Design
Causality studies is the understanding a fact in terms of conditional
statements. This is helpful in measuring the impact of specific changes on the
existing norms and assumptions. Most researchers seek causal explanations that
reflect tests of hypotheses. Causal effect occurs when variation in one fact, an
independent variable, leads to or results, on average, in variation in another fact, the
dependent variable.

Causality research design helps researchers, through the process of proving a

causal link between variables and eliminating alternative potentialities, to identify
and understand why the world works the way it does.

Cross-Sectional Design
Cross-sectional research design mainly following distinctive features:
 No time dimension
 A reliance on existing variance instead of modification of following intervention
and
 Teams are shortlisted based on existing variance instead of random
allocation.

The cross-sectional designs mainly measure the differences between or from

among the variety of individuals, subjects, or phenomena instead of modification.
As such, researchers’ can employ a relative passive approach to make contributory
inferences based on findings.

Cross-sectional studies give a `snapshot' of the end result and this

characteristic related to it, at a particular point of time. In contrast to the
experimental design, where there is a strong intervention of researcher to produce
and calculate changes or to create variations, cross-sectional design specialize in
studying and drawing inferences from existing variations between the individuals,
subjects, or phenomena. It requires collection of data and information at particular
point of time. Similarly longitudinal research involves taking numerous measures
over an extended period of time; cross-sectional design is mainly focused on finding
Research Methodology and Review of Literature 59

relationships between variables in a single moment of time. Group[s are selected

purposely based on existing variations in the sample instead of seeking sampling.

Cross-section studies are able to utilize knowledge from various subjects

and, in contrast to observational studies, without any geographical bound area. It can
estimate prevalence of an outcome of interest because the sample is usually taken
from the whole population. The main drawback of this design is, it provide only a
snapshot of analysis so there is always the possibility that a study could have
differing results if another time-frame had been chosen.

The study aims to review the initial attempts being made in India to establish
the practice of environmental auditing, which is a fast-emerging new concept,
especially in industries that cause pollution. The concept of the environmental audit
is to highlight the notifications issued by the Government of India. A case history is
included to demonstrate how the status of environmental management systems and
equipments are investigated vis-à-vis the Indian regulatory requirements, and how
material, energy, health, and safety audits have been conducted to identify avenues
for savings in the cost of production.

The objective of this study is:

1. To find out the emerging opportunities for environmental audit in India.

2. To assess the driving forces for implementation of environmental audits in

large scale industries.

3. To determine the strengths and weaknesses of environmental auditing

practices carried out by large-scale industries.

4. To assess the barriers to successful implementation of environmental audits

in their operations.

5. To determine the role of internal auditor in environmental audit.

6. To make recommendations for effective implementation of environmental

auditing in large scale industries.
Research Methodology and Review of Literature 60

HYPOTHESES
The present study is based on the following null hypotheses:
H01 The companies under study are not following the environmental audit
practices systematically.
H02 There is no sufficient scope of applying environmental audit practices in the
companies under study.
H03 The companies under study are not showing the results of environmental
audit with their financial statements.
H04 Environmental audit is not significantly different from the financial audit.
H05 There is no significant difference in the environmental audit practices
adopted by the companies under study.

SCOPE OF THE STUDY

Large scale manufacturing companies comprise the population of interest in
this research. The manufacturing sector shall be of interest because of its impact
upon the environment. The sampling frame shall be the Joint Stock Companies The
rationale for selecting the sample from the companies included in the list that they
should have at least begun to address the issue of environmental protection. The
companies would be expected to have an environmental management system which,
at a minimum, addressed regulatory compliance. Private companies shall be
excluded from this research because of the lack of availability of financial
information. The greatest polluters shall be chosen. It would be also expected that
companies reporting the greatest quantities of releases and transfers of toxics were
more likely to have implemented some form of environmental management to
address environmental issues than were companies reporting low releases and
transfers. One reason for this theory would be the belief that the greater polluters
would be more concerned with assuaging the environmental concerns of their
stakeholder groups.

A detailed study of the companies under study has been made through
various sources including journals, literature and information available on their
respective websites.
Research Methodology and Review of Literature 61

RESEARCH METHODOLOGY
Data Collection: The present study is based on primary as well as secondary data.
Primary data is collected through head offices or interviewing of executive officers
of concern departments. Data relating to environmental audits have been collected
from books, journals and documents in the libraries. On-line library system has also
been used to access the secondary information from books, journals and previous
research reports. Sources of data have been indicated in the text and the tables. A
detailed bibliography is also given at the end of this thesis.

Data Analysis: After the collection of data, they have been redrafted in proper
formats and analysis has been made accordingly. Due to the exploratory nature of
this research, the primary methods have been descriptive techniques. Descriptive
statistics such as mean, standard deviation, coefficient of variation as per the
requirement have been used. Hypotheses have been tested by applying appropriate
test of significance viz., t-test, f-test etc.

Period of Study: The study mainly covers the current and relevant period i.e., from
2010-11 to 2015-16 for which the data became available from different sources
within reach.

REVIEW OF LITERATURE
Before starting the present research work, an extensive review of literature
from different sources, concerning with the topic of this study has been carried out
which is given hereunder.

Nutek (2002) identifies the most important driving forces behind

environmental work in small enterprises. They are in order of importance,
(1) management commitment, (2) consumer demands, (3) reduced resource
consumption, (4) competition, (5) coercive legislation, (6) demands on subcontractors
and (7) future legislation.

Perez-Sanchez et al. (2003) identify customers as the main drivers behind the
implementation of environmental management tools, followed by legislation. Hillary
(1999) identifies comparable benefits (drivers) as and notes also that communication
Research Methodology and Review of Literature 62

channels, skills, knowledge and attitudes are all improved in SMEs adopting EMSs.
According to him, the most important stakeholders for implementing EMSs are
customers, the local government and community, regulators and employees,
insurers, the general public and suppliers.

According to the study conducted by Harvinder Singh (2007), the

environment crisis has become a global issue now a day. The growing concern for
environmental protection is also reflected in the govt, policy of many countries
around the Globe. Rapid growth of industries has disturbed the ecological balance in
the whole world seriously. As a result the green house effect and related issues are
posing serious threat to humanity worldwide. It’s now the responsibility of the
human being to understand and act accordingly for the efficient and sustainable
development of the environment.

Growing industrialization and urbanization are continuously depleting

natural environment. To all this development business and industry cannot remain
silent spectator. There is need that business and industry should realize their role in
eco protection hence new concepts such as environmental impact assessment,
environmental accounting, compliance of environmental laws, environmental
accounting, compliance of environmental laws, environmental disclosure practices
are fast emerging as a new era of accounting and reporting. It was considered
essential that business functions should reflect its impact on ecological environment.
Without considering their environmental impact, maintaining accounts and
interpreting the results, improper reporting may give to dubious picture of the
business corporations.

Mark E. Peecher, Rachel Schwartz and Ira Solomon (2007), discussed the
antecedents of and rationale for what has become known as Strategic-Systems
Auditing (SSA). Authors also described the conceptual foundation and key elements
of SSA. They observed that the auditor employing SSA conceives the audit as a
process of evidence-driven, belief-based, risk assessment. They also illustrated
facets of this process, including how the auditor, by acquiring a rich understanding
of how and how well management is executing its business-model, develops rich
Research Methodology and Review of Literature 63

(e.g., distributional) expectations of future financial-statement amounts and

disclosures. These expectations create a benchmark standard against which the
auditor later on compares and investigates management's declared financial-
statement and disclosures. Author finally creates and replies to a number of common
questions about the components of SSA and completes the analysis paper by
suggesting some educational innovations and high-value targets for analysis &
research.

One salient message is that 1st SSA emerged in 1990’s as an attempt to

support and enhance audit quality in response to changes within the audit
environment. Another salient message is that SSA continues to equilibrate, adapting
to frequent environmental changes, especially society's demand for enhanced
protection from financial-statement fraud. Such adaptation needs latest, vital
intellectual investments by audit practitioners and audit scholars/educators.

Dave(2003) carried out an analytical study on more than 100 Indian

companies to find whether they were conducting social audit, environment audit or
not. As per his study there were the example that Tata Iron and Steel Company and
Unit Trust in India who had conducted a social audit, but there was no example of
Indian company who had conducted proper environment audit by following all rules
and regulations. Only a few maintained social accounting and environment
accounting. However, very less number of companies made social and
environmental reporting in their annual reports.

Cheema and Singh (2004) in their study, attempted to examine

stakeholder’s influence on the status of environmental disclosure in the Indian
companies.

The specific objectives of the study conducted by Cheema and Singh were:
i) To study how far the status of environmental disclosure is associated with
company size.
ii) To study the creditors’ influence on the status of environmental disclosure.
iii) To study the foreign influence on the above status.
Research Methodology and Review of Literature 64

The findings of their study were:

i) Big size companies for having more stakeholders’ environmental
accommodation and reporting practices are much better than the small size
companies.
ii) Companies for having foreign customers are more conscious about
environmental disclosure than others.
iii) Creditors have no influence on corporate environmental disclosure.

The above researchers pointed out the followings:

(i) The big companies for having huge pressure from their large size of
stakeholders are much more responsible in regard to environmental
performance.
(ii) The companies for having foreign customers who are more environmental
conscious are more concern about their environmentally disclosure.
(iii) Indian creditors are more concern about economic performance than
environmental performance of companies.

Eilbert and Parker (1973), Spicer (1978), Watts and Simmerman (1978)
Trotman and Bradley (1981), Deegan and Gordon (1996) also argued that the
corporate environmental reporting is highly correlated with the company size.

Garg and Sinha (2004) in their article mentioned the importance of

environmental disclosure for better environmental performance. They also pointed
out the growth in environmental reporting in last two decades which was not
satisfactory in terms of quality and quantity. They concluded with some proposed
framework for corporate level environmental reporting in India. They observed that
corporate environmental reporting practices were still at initial stage. They
significantly noted that “Companies in the developed countries do not want stringent
environmental disclosure norms in place of developing countries. This is because a
stringent norm may affect their business.”

Charles H. Cho, Jennifer C. Chen and Robin W. Roberts (2008) draw from
prior research in political science, management, and accounting to develop a basis
from which to examine how corporations try to influence legislation and legislators
Research Methodology and Review of Literature 65

for their self-interest and deviate from their expected accountability. Specifically,
authors investigated how PAC contributions, a type of corporate political strategy,
can be used as a tool for business entities to deviate from their reporting
responsibility.

The Emergency Planning and Community Right-to-Know Act of 1986

(EPCRA) was drafted and passed immediately following the 1984 Union Carbide
gas leak incident in Bhopal, India, as a result of rising environmental concerns and
demand for right-to-know regulation. Among other pollution prevention policies and
regulations, one feature of this legislation requires firms from certain industries to
publicly disclose information related to their toxic chemical releases.

This study provides empirical evidence that affected firms were already
striving to reduce or mitigate environmental disclosure regulations, using political
avenues, despite global environmental crises. The analysis finds that a sample of
firms from the chemical and petroleum industries made significant campaign
contributions to legislators deemed influential in the passage of the EPCRA.
Moreover, authors reported that this use of political strategy, evidenced by the
relatively high amount of contributions, may have affected the roll-call vote on the
passage of an EPCRA disclosure-related amendment. Their results are consistent
with the argument that firms that will be affected by pending regulations become
actively involved in politics to reduce public policy pressure and exposure.

According to the study by Paul Ashcroft and Murphy Smith (2008), business
organisations are under scrutiny to supply correct environmental reportage, as well
as cost of capital and details of operative expenses regarding pollution.
Environmental reportage is incorporated into annual financial reports and must
publish as specialised environmental reports separately. The extent or value of such
information is suitable subject for conducting research. This study investigates
environmental reportage in audited financial statements of U.S. and Canadian
companies before SOP 96-1, to see whether environmental regulation mentioning in
SOP 96-1 was required. One would expect that environmental information would be
helpful to shareholders and other users in assessing the environmental risk exposure
of a firm. The key question self-addressed by this study is whether a firm's reported
Research Methodology and Review of Literature 66

environmental details (environmental cost of capital and environmental operative

costs) truly reflects the firm's pollution. The findings of the study recommend that a
lot of companies were failing either to record or to fund necessary environmental
expenditures, and thus, they may have significant amounts of unrecorded future
environmental obligations. As a result, the accounting framework provided by
FASB, mentioning in SOP 96-1, was acceptable for enhancing financial reportage
concerning to environmental matters.

According to Nicole Darnall, Inshik Seol and Joseph Sarkis (2009), while the
use of internal, external, and both environmental audits are more pervasive in
society, very little recognized regarding the stakeholder influences related to their
use, in a very big part as a result of previous analysis has viewed them as a uniform
type of management practice. This study mainly depends upon stakeholder theory to
explore organizations' use of various forms of environmental audits. It uses
international production data and information to indicate that important variations in
the use of environmental audits are related to differences in stakeholder influences
and an additional nuanced treatment is required while evaluating these audits.

According to Jutta Geldermann et al. (2009), emergency situations in

environment are different in many ways, for example difference in their causes and
the dimension of their impacts. Yet, they share the characteristic of unexpected onset
and the requirement for a coherent and effective emergency management. In this
paper we consider decision support in the event of a nuclear or radiological incident
in Europe. RODOS, a word for for real time on-line decision support system, is a
support system designed to bring support from the primary phases through to the
medium and long phases. This work highlights the role of multi-criteria decision
analysis (MCDA) within RODOS in guarantying the transparency of decision
processes among emergency and remedy management. Special stress is placed on
the study of other remedial or counter measures using the multi-criteria decision
support tool Web-HIPRE in scenario targeted decision making workshops involving
different professional groups or stakeholders. Decision support is increased by a
module that generates linguistic communication explanations to facilitate the
understanding of the analysis method, thus contributing to the direct involvement of
the choice-makers, with the aim of accelerating their confidence on the results of the
Research Methodology and Review of Literature 67

analyses done, forming an audit trail for the decision making method and raising the
satisfactoriness of the system as a whole.

According to Linda S. Spedding (2009), Legislative and economic

incentives, both have placed the environment high on the agenda for organisation
and government agencies. Some organizations are conscious of this trend and have
reflected it in their growth from the beginning; others have taken it on board at a
later stage. There are some organisations which have taken their environmental
responsibilities extremely seriously over the years, conscious of the fact that the
combination of green concern and objectives of organisation is must for business.
This has been demonstrated in the ways in which they are doing business as well as
their approach to transactions. The environment is a transboundary worldwide
concern as has been vividly demonstrated in the discussion over global climate
change. However large amount of the push towards the greening of business has
conjointly ensure through national initiatives of various jurisdictions, wherever the
competitive edge has been noted as well as through regional initiatives of the EU's
environmental action programs, both as regards legislative and market-based tools.
Environmental audits deemed to be the most effective tool for bringing
environmental reform in organisation processes and practices. This could be true as
long as they're one among many mechanisms used in a larger scheme geared toward
considerably raising a company's environmental performance.

Philip J. Tattersall (2010) opined that Community Based Auditing (CBA)

has arisen in response to the ongoing conflict over the management of Tasmania's
natural resources and in particular publically owned forests and water resource. The
origins, philosophy and central methodology of Community Based Auditing are
described and discussed. The author discusses how melding the principles of Post-
Normal Science with methods of action research and environmental auditing has led
to an innovative form of community engagement where empowered citizens
undertake disciplined inquiry into issues relating to natural resource planning and
management. Of particular concern are the notions of certainty embedded in present
frameworks underpinning government legislation, natural resource planning and
management. It is believed that this has led to a pattern of decision-making that is
inappropriate, unfair and ultimately counter- productive. Case examples are
Research Methodology and Review of Literature 68

presented where citizens have applied the CBA methodology in dealing with
contentious issues within the Tasmanian forestry industry. The author concludes that
the CBA innovation has helped to improve the depth and quality of citizen
involvement in natural resource management and at the same time provides the
impetus for greater accountability on the part of those charged with managing
Tasmania's natural resources. It is felt that the methodology may be able to be
applied to other contexts where the need for greater inclusiveness in decision-
making relating to natural resource management has been demonstrated. The
consequences for the evolution of environmental activism are also thought to be
significant as a new form of community-based activism is now possible.

According to Gunther Ortmann (2010), rules and standards are considered to

be of vital importance for the functioning not only of organizations but of societies
as well. The difficulties and paradoxes related to the theory of rules and rule-
following are scrutinised regularly in the context of philosophy than of scientific
discipline. In this study, author has drawn on the writings of Wittgenstein and
Derrida to examine four particular characteristics of rules and standards: first, the
dependence of their validity and meaning on the practice of rule-following. Second,
properties that have led him to describe them as pharmaka in Derrida's (1997) sense
which means medicine or poison and possibly illicit drugs. Third, their dependence
on the probability of rule-breaking and fourth, their being inevitably subject to drift
which in general is useful in several cases however dangerous in others.

Author argued that the drift of rules and standards becomes increasingly
dangerous when more processes become path dependent. This research examines
four cases as examples of dangerous drifts in the context of organizations: the drift
of environmental standards, the Challenger disaster, a friendly fire case in northern
Iraq, and Michael Power's "audit explosion."

Charl de Villiers and Chris J. van Staden (2010) surveyed individual

shareholders in Australia, the UK and the US regarding corporate environmental
disclosures. In general, respondents within the 3 countries absolutely disposed
towards and have an interest in these disclosures. They observed country and gender
variations with Australian and female respondents a lot in favour of environmental
Research Methodology and Review of Literature 69

reporting than others. Specifically, respondents need an outline of environmental

risks and impacts, the environmental policy, performance against measurable
environmental targets and knowledge and information on several environmental
associated costs. Most of the stakeholders need environmental disclosures to be
audited. Stakeholders need environmental details as they believe that managers
ought to be responsible towards them for their organisation’s environmental impacts.
Further, they have indicated the uses for specific type of environmental data and
information.

The results of the study imply that legislators, standard setters and companies
have to consider the policy implications of these shareholder views.

Rob Gray and Sue Gray (2011) in their work mentioned that there continues
to be many attempts to articulate what is meant by Human Rights but Griseri and
Sepella's (2010, p.176) adaptation of Leighton et al. (2002) as "entitlements that one
holds by virtue of being a human being" takes us to the heart of the matter. What is
it to be human and what our humanity demand of us? However the notion is way
ahead from settled; it's faraway from uncontentious; despite its domination by
lawyers it's remote from simply legalistic; and the matter has recently been
considered as a matter of focus amongst business and management academicians.
Human rights have, as yet, nearly no presence in accounting and finance. This short
essay seeks to produce an introduction to the researchers papers presented in this
issue of CPA and in doing so to produce some context within which the papers get
appreciated.

As happens too often for comfort, practice (at least regulatory and NGO
practice) is still leading research and theory in the field of Human Rights.

According to Sangita Pradeep Ingole (2012), environmental auditing is a

management tool that merely inspects and scrutinizes the environmental
management activities performed by the industries or organizations and makes them
responsive to new better and upgraded technology. For the impact of industries and
their product on natural resources and environmental quality it's necessary to possess
"Environmental Audit" to confirm sustainable industrial developments. Objectives
Research Methodology and Review of Literature 70

desires and benefits are targeted during this paper. Moreover, audit themes,
approaches, characteristics, case studies in India are also explained. For better
implementation and popularization of environmental audit in India, surveys are
conducted to review existing management systems and internal controls. To
assemble satisfactory data and information to construct a basis for evaluating the
responsibility of internal controls in achieving desired environmental results.
Suggestive measures also are steered for the development of organisations and
societies as whole.

According to Richard G. Brody (2012), the extent to that external auditors

consider the work of internal auditors is a very important judgment. Recently, Public
Company Accounting Oversight Board has suggested that external auditors "rely
(more) on the work of others" to cut back the greater-than-expected cost related to
compliance with Section 404 of the Sarbanes-Oxley Act. Reliance on decisions,
however, are difficult tasks that need skilled judgment and might be influenced by
variety of factors, both internal (cognitive and affective) and external
(environmental), considering the auditors' operating style and past experiences
associated with barriers to external/internal auditor cooperation (e.g., past knowledge
and experienced low versus high auditor judgement and/or competence). Authors
through experiments examine these influences in their analysis reported herein. In
line with expectations, external auditors' work plan considerably influenced the
extent of planned audit testing, auditor confidence on internal auditor judgments,
and interpretation of analytical procedures results. Auditors' perceptions concerning
internal auditors' ability and judgement, developed over years of interaction, also
influenced these judgments, and interacted with work styles. Inconsistent with
expectations, auditor rank (senior versus manager) didn't influence judgments.

George Emmanuel Iatridis (2013) target on common law of Malaysia which

is assessed as a advanced growing market. It assesses the association between
environmental performance and disclosures and examines the monetary attributes of
organisations with completely different environmental disclosure scores. It
investigates the relation between environmental disclosure quality and organisational
governance, and examines the extent to which effective environmental disclosures
are worth relevant and the way they influence stock holders perceptions. The results
Research Methodology and Review of Literature 71

of the study shows that disclosure of related information is positively coupled with
environmental performance of the organisation. Attributes, like size, the requirement
for capital, profitableness and capital spending, are positively related to
environmental disclosure quality. High quality environmental disclosers show
effective corporate governance and would tend to face less difficulties in accessing
capital markets. They often audited by big four auditor or cross-listed on foreign
stock exchanges and show important levels of control and institutional ownership.
High quality environmental disclosures are worth relevant and improve the
perceptions of investor. High quality disclosers overall belong to beverages,
chemicals, food producers, forestry and paper, and industrial metals and mining.

The study conducted by Teng-Yuan Hsiao, Chung-Ming Chuang, Nae-Wen

Kuo and Sally Ming-Fong Yu (2014), establishes attributes of an environmental
management system (EMS) for the hotel industry in Taiwan to form an instrument
to address the green hotel auditing. Hotel EMS indicators were primarily selected
from ISO14000 and nine- representative foreign green hotel assessment systems.
The Delphi methodology conducted by25-specialists with government organisations,
students and hotel managers for item modification to spot the preliminary EMS
analysis framework. An indicator selection method was utilized to work out the
dimensional indicators of the system. The information analysis reveals that a
complete of sixty four indicators into 10 dimensions were identified and prioritized
in terms of their relative importance and feasibleness. Moreover, 38- indicators are
appropriate to be used and eighteen of them ought to be implemented first of all in
Taiwan hotel business. The results conjointly reveal the comparison with Taiwan
government's environmental standards. Finally, the EMS approach of this study
provides social control implications for state, hoteliers and shoppers to enhance their
environmental management.

Marianne Bradford, Julia B. Earp and Severin Grabski (2014) opined that
system security could be a prime issue facing by worldwide organizations. This
study investigates the constraints and benefits of a eminent centralized end-to-end
identity and access management (CIAM) implementation and the moderating role
that ERP systems have in the implementation. Authors applied the Technology
Research Methodology and Review of Literature 72

Organization Environment (TOE) framework to a case study approach. They found

that structure and technological factors result in lapses in IT governance and act as
barriers to CIAM. Environmental factors conjointly hinder CIAM implementation.
In addition, ERP systems facilitate the development of a CIAM because of
integration and standardization of identities and automatic provisioning. Once the
ERP system supports CIAM, the organization and its staff expertise significant
benefits including single sign-on capabilities, amplified security and privacy,
efficiencies in user provisioning and password management, and audit method
advancement. Their results are going to be of worth to any organization
implementing CIAM and ERP. Researchers can even use these findings to any
further study IAM, ERP or extensions to the TOE framework. The study by Carla
Edgley, Michael J. Jones and Jill Atkins (2015) investigates the logics or values that
form the social and environmental reporting (SER) and SER assurance (SERA)
process. The influence of logics is ascertained through a study of the
conceptualisation and operationalization of the materiality concept by accounting
and non-accounting assurors and their assurance statements. Authors gathered
qualitative knowledge and information from interviews and questionnaires with both
accounting and non-accounting assurors. They analysed the interaction between old
and modern logics that are shaping materiality as a reporting idea in SER. SER is a
rich field to study the dynamics of modification because it is a voluntary,
unregulated, qualitative coverage arena. It has a broad, stakeholder audience,
wherever accounting and non-accounting organisations are in competition. There are
3 key findings:
1. The introduction of a brand new, stakeholder logic has considerably
modified the meaning and role of materiality.
2. A versatile, performative, social understanding of materiality was delineated
by assurors, with a forward looking instead of a historic focus.
3. Competitory logics have inspired completely different beliefs concerning
materiality, and practices, to develop.
Research Methodology and Review of Literature 73

This influenced the way assurors theorised the idea and analysed outcomes.
A patchwork of localized understandings of materiality is developing. Policy
implications both in SERA and financial audit are explored.

The study by Wen-Kuei Wu, Hui-Chiao Chen and Yi-Xiu Huang (2015),
aimed to develop and testify a model of antecedents and consequences for marketing
audits (MAs). The study used a mail survey and a partial least sq. (PLS)
methodology to check the hypotheses. Drawing on a sample of Taiwanese
corporations, the results show that
 A grater environmental liberality indicates that less MAs are enforced.
 A proactive business strategy contributes considerably to the implementation
of MAs.
 MAs will contribute significantly to promote performance.
 MAs mediate the association between environmental factors and promoting
performance.

The research paper by Ribeiro A.C., Sousa A.L., Duarte J.P. and Frutuoso e
Melo (2016) presents a human reliability analysis (HRA) model that allows the
incorporation of features related to facility conditions to determine human error
probabilities (HEP) used in probabilistic safety analyses of process plants. Authors
present an approach to show the predominance of human factors as an accident
cause, as well as existing methodologies for HEP determination and their
deficiencies in incorporating socio-technical elements that influence them. Such
elements are: inappropriate form, training, procedures, communication, and safety
culture, management within the production process alteration, emergency planning,
accident investigation, environmental factors, maintenance workload and human-
system interface. A mathematical model is projected to include these parts taking
under consideration their contribution weights as well as measuring their degree of
implementation within the plant. This creates an element that may modify existing
HEPs, giving values that better reflect plant reality. The model was applied to the
accident that occurred in 1999 in Tokai-Mura, Japan. The changed HEP was two
times bigger than the nominal HEP. This shows that considering operational factors
Research Methodology and Review of Literature 74

totally permits for a more realistic plant behaviour modelling in face of abnormal
events.

The study conducted by Mara Vogt, Nelson Hein, Fabricia Silva da rosa and
Larissa Degenhart (2017), aims at analyzing the link between determinant factors of
revealing of data on environmental impacts of Brazilian corporations. A descriptive,
documental and quantitative analysis was conducted through a sample of ninety
seven Brazilian corporations. In the sustainable reports and annual reports
information, 5 environmental aspects were collected: emissions, effluents, wastes,
products and services; and transport, that were used to calculated the degree of
environmental disclosure. This concludes that there's a relationship between the
variables investigated in all scrutinised years. The size, audit and Global Reporting
Initiative (GRI) are related to disclosing and the company sustainability Index (CSI),
Pollution Potential (POTEN), governance, stocks, and return on Assets (ROA) and
return on Equity (ROE) are not.

It was observed and explored by Saurabh H. Patel (2017) that environmental

auditing did not witness evolution in a strict linear manner. Multiple significant
happenings led to increasing need and demand of practices that may empower
business entities to chalk out some remedies that may serve as an antidote to
ongoing massive damage in the trajectory of environment.

Over recent years, it has become obvious to both industry and the general
public alike that the damage being caused to all facets of environment makes the
existence itself unsustainable. The old approach to pollution prevention `react and
cure' has been recognized as an unsophisticated way of dealing with environmental
problems, and is being superseded by a new phenomenon `anticipate and prevent'
approach, which is more penetrating and cost effective. The realization has led to the
development of a wide range of environment management techniques specifically
aimed at reducing industry's impact on the environment.

According to Kevin Oldham, Jack Stanton, Matt Bilderbeck and Jessica

Spinetto (2017), adopting the principle that it is better to self-regulate than to be
Research Methodology and Review of Literature 75

regulated. Voluntary accreditation schemes are introduced by a range of high-

hazard industries to lift up safety and environmental performance. Both industries
and regulatory authorities need to acknowledge if such programmes are effective.

This research paper presents a comparative case study of safety and

environmental performance for a voluntary industry-led accreditation programme
(Air care) in the New Zealand agricultural aviation sector. The study hypotheses
relate to rates of reported:
 Accidents
 Incursions and other incidents
 Discharge and low flying occurrences
 Equipment defects

While there were observed differences in rates for the above occurrence
types between accredited, transitional and non-accredited operators, none of these
was found to be statistically significant, therefore the null hypotheses could not be
rejected.

An additional sensitivity test was undertaken in which all examined

occurrences were combined into one variable "all events". Non-accredited operators
had a higher rate of these combined occurrences (risk ratio 1.32) and this finding
was significant at a 90%, one-tailed, level of confidence. The additional test suggests
that statistically significant results may emerge as more data becomes available.

This finding indicates that participation in robust voluntary safety and

environmental programs may be associated with lead indicators of safer operations
and fewer environmental incidents. Participation in such programs may therefore
convey important information on likely future safety and environmental performance.

The above literature shows that a limited research work has been done in the
area of environmental auditing and there is no research work has been done to find
out the outcomes of the guidelines. Keeping this fact in view the present topic has
been selected for the research.
Research Methodology and Review of Literature 76

RESEARCH GAP
Although so many research work is already done in the field of Environment
Audit in India, but there exist a lot of area in the Environment Audit concept which
need to be explored further to make it more comprehensive and elaborative. Studies
on Implementation of Environment Audit, on proper Feedback Policy and on Non
Disclosure Policy etc are still pending in this field. Further only mandatory
compliance of law does not fulfill the sole motive of any laws or acts. A research
must be done on efficient and effective implementation of Audit procedure so that it
will become fruitful for all the users.

LIMITATIONS
The research has been mainly limited to publicly-held companies, operating
in manufacturing industry categories, which reported their environmental attributes.
All other entities and industries have been excluded from the research.

An external analyst has to function under various constraints and limitations.

Since the researcher has to depend heavily upon published reports and secondary
data, one of the limitations lies in the quality of the accounting data. Further, the
techniques and tools of investigations have also inherent limitations, e.g. financial
data are the mixture of convenience and convention. Another limitation to be faced
is the non-availability of desired information regarding the working style of key
persons and their efficiency. They posed to be extremely busy. They preferred to
brush the interviewer aside. They were miser and niggardly in discussing relevant
matters. Lastly, the study is a subject to general human limitations.
Research Methodology and Review of Literature 77

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