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An International Meeting of American Accounting
Association
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Accounting disclosure of the Toxics Release Inventory for 2002 |
Martin Freedman
Towson University
A. J. Stagliano
Saint Joseph's University
Abstract: The Toxics Release Inventory (TRI), produced yearly by the U.S. Environmental Protection Agency, contains a rich collection of data about hazardous chemical emissions of American industrial plants. This study attempts to determine whether mandated TRI disclosures are carried over to financial reports and other publicly available sources of information about the firm’s performance. We examined disclosures of the 200 highest-volume emitters of toxic chemical wastes for 2002 and found no correlation between the level of such releases—as reported in the TRI—and extensiveness of company reporting in non-TRI sources. Separately, we tested for a relationship between the volume of carcinogenic compounds released and financial statement disclosure by these same firms. We found none. Larger companies in our sample (measured by asset size) did appear to be “better” reporters of their emissions in non-TRI sources.