The manager’s decision in acknowledging and disclosing environmental liability: A Behavioral Model

• Main Author: Susi Sarumpaet
• Format: Article
• Language: English
• Published: Pusat Penelitian dan Pengabdian Masyarakat Sekolah Tinggi Ilmu Ekonomi (PPPM STIE) 2016-11-01
• Series: Journal of Economics, Business & Accountancy
• Subjects: accrue, disclose, environmental liability, theory of planned behaviour.
• Online Access: https://journal.perbanas.ac.id/index.php/jebav/article/view/481

This study analyzes why managers accrue and disclose environmental liability, which involves managers’ discretions. Using the framework of the Theory of Planned Behavior (Ajzen 1991), this research hypothesizes that a manager’s intention to accrue and disclose environmental liability is influenced by: (1) attitudes (2) subjective norms, and (3) perceived behavioral control of the manager towards accruing and disclosing such information. The data was collected through a survey, employing a questionnaire modified from Weidman (2002). Responses from 50 corporate managers in Lampung Province were analyzed using structural equation model software package SmartPLS. This study finds that a manager’s attitude towards environmental liability is positively associated with his/her decision to accrue and disclose environmental liability. However, there is no evidence that subjective norms and behavioral control are associated with such a decision. An additional test using attitude as a moderating variable provides evidence that both subjective norms and perceived control behavior are positively associated with the attitude towards environmental liability.