THE ROLE OF MANAGEMENT AND COST ACCOUNTING IN REDUCING EXPENSES IN LIGHT OF CLIMATE CHANGE

Abstract

Climate change is the most essential environmental risk for business investment, according to financial institutions, regulators, and analysts. Climate change is considered an environmental risk that has potentially far-reaching effects on the business environment. There is a growing global acknowledgment of the putative dangers of climate change on the ecosystem worldwide. Many organizations perceive climate change as a potential danger to future competitiveness and profitability. (Monasterolo, 2020). Management accounting will be studied in this research in regards to the responses of enterprises to climate change. It is vital to consider how enterprises adopt management responses (such as environmental management accounting (EMA) and greenhouse gas reductions (GHG) tools) to climate change, how they cope with expense management, and what part further management accounting tools, such as activity-based costing (ABC), standard costing, variance analysis, and target costing, have in coping with climate change-related initiatives. Research on the preparation and influence of climate change initiatives from the perspective of management accounting is currently limited, and this issue will be investigated in this research. (Schaltegger et al.2022). Both the academic and practical management accounting fields must respond to the growing environmental issues. A global review shows that several management accounting tools have been created and/or modernized to improve intra-firm resource allocation in light of environmental management systems. More specifically, it has been suggested that management accounting should better accommodate the needs of discrete utilities to track non-financial, environmental effects associated with business processes. Overall, it has been noticed that environmental concerns are beginning to influence management accounting schemes. (Jiao et al.2023). The purpose of this research is to survey both private and public enterprises in Iraq on the use of management accounting tools in climate change initiatives. Specifically, managers are asked whether or not tools presently in use (i.e. management control tools as well as cost accounting tools) have been influenced by climate change initiatives. (Huttunen et al. 2022).