Environmental financial accounting and auditing

This chapter aims to identify the theoretical-methodological foundations through analysis and criticism of the culture of financial accounting and auditing with an environmental focus, which demonstrates the need to economically evaluate the environmental impacts caused by organizations in their process. of production and / or service in the fulfillment of your order or state object.

environmental-financial-accounting-and-auditing

Evolution and conceptualization of environmental financial accounting

Accounting is an empirical, social and economic science, with an important normative component, which is responsible for the study of economic reality. To do this, it is capable of providing information about that reality that is as relevant, reliable, rigorous, understandable and faithfully as possible, taking into account the specific needs of all those users who have a reasonable right to that information. In this regard, authors such as Larrinaga, (2007) and Llull, (2010) refer to the importance of assuming criteria regarding the rationality of this information, associated with environmental activity.

In this sense, accounting must have the ability to gather relevant information on economic events, so that it can be used quickly and in a timely manner by users. With this perspective, from the 70s to date, a new area of interest arises as a pressing need for companies, shareholders and suppliers: environmental financial accounting. On this field, and related to the concept, there are congruences and discrepancies, as explained below:

Table 1. Criteria of authors analyzed on environmental financial accounting

Authors	Conceptualization	Theoretical limitations
Carlos Larrinaga (2002)	A part that provides quantitative information associated with environmental assets, liabilities and contingencies.	It does not define the concepts associated with environmental income, expenses and assets.
Authors	Conceptualization	Theoretical limitations
Antoni Llull Gilet (2002)	The ability to provide relevant information associated with the environmental resource, so that it can be perceived by customers and competitors.	It is not based on what type of relevant information refers to and how it is perceived by customers.
José Mariano Moneva (2003)	Provides relevant accounting information on environmental aspects of a company.	It does not refer to what type of accounting information.
Luisa Fronti (2006)	It is an area that is responsible for providing relevant information associated with environmental aspects in the company.	It does not set the boundaries between financial accounting and environmental management.
Gray and Bibbintong (2007)	The ability to issue accounting information on the environmental activities of a company.	It does not specify the limits of the type of environmental accounting information to be issued.

Source: Own elaboration from the consulted bibliography.

As can be seen, and despite theoretical limitations, similar criteria coexist on this matter. However, the author of this research considers environmental financial accounting as that part of the accounting system that has the purpose of providing information on the financial impact of environmental aspects, through the financial statements; It also includes specific information on financial aspects of the company's environmental performance, related to environmental assets, liabilities, capital, expenses, income and investments.

Environmental financial accounting in its evolution has gone through different periods, such as the following:

First period (1971 - 1980) Social and environmental accounting appears much less delimited than it is today, with primacy of social aspects over environmental ones; There is an abundance of empirical work dedicated to analyzing the quality and quantity of social information published by companies, with a descriptive approach, Larrinaga, (2002).

Second period (1981-1990) There is a progressive specialization within social and environmental accounting, so that the social aspects generate abundant literature on value added statements and reports on employees Llull, (2003).

The concern for environmental aspects takes precedence over social ones from the second half of the decade; However, there are no great advances in the evaluation of externalities or in their internalization. Empirical research is less descriptive and becomes deeper and more analytical. The conclusions obtained reinforce the hypothesis that the companies that report their environmental impacts do so mainly concerned with their image and (or) their results and that this information is unreliable. The normative models, so in vogue in the previous period, are absent in this one, although instead there is a deep conceptual debate on the role of accounting in social and environmental information Carrasco, (1995).

Towards the end of the decade, fundamental contributions were made in the field of environmental economics, presenting the latest studies on this subject, which will bear fruit in the following period.

Third period (1991-2000) It is characterized by a clear preponderance of environmental accounting over social accounting, in full harmony with the strong international awareness of environmental problems Garcia Fronti, (2006).

The appearance in the second half of the decade and, with notable strength, of standardized environmental management and audit systems (EMAS, ISO 14000) has not yet had the reflection it deserves in the accounting literature, Llull, (2003).

Fourth period (2000 to present) An approach to environmental accounting regulations is produced, expressed through international financial reporting standards, with the following appearing: Larrinaga, (2002).

IFRS 1: Presentation of Financial Statements: companies are advised to present environmental reports, provided that management believes that they can help users make economic decisions.

IFRS 16: Property, plant and equipment: some elements that make up property, plant and equipment, may be acquired for safety or environmental reasons.

IFRS 36: Impairment of assets: recoverable amount of assets.

IFRS 37: Provisions, contingent assets and contingent liabilities: recognition of provisions. Only those obligations arising from past events, whose existence is independent of future actions, will be recognized as provisions; An example of such obligations are environmental fines or costs associated with the repair of environmental damage caused against the law.

Based on the above, this author considers that the advances in environmental financial accounting in the world are still incipient, in spite of the efforts made in the field of research by specialists and by some initiatives of associated organizations to environmental strategies and policies, the results are still limited, and a consensus has not been reached to obtain a technical accounting regulation that allows quantitative allocations to environmental impacts as well as the absence of an environmental Account Plan in organizations that can measure economically, this variable, not being Cuba exempt from this problem. Hence, the need arises to develop accounting instruments (rules, procedures) that can seek alternatives in this regard.

In the author's opinion, the fundamental gaps are given by:

No general consensus has been reached regarding terminologies that differ by country and geographical area. Each country, organization and industry has its own particularities in accounting regulations. Initiatives by accounting associations and national regulatory bodies in this regard are few. with regulations for the execution of environmental accounting audits.

The foregoing presupposes that the environmental accounting audit must play an important role to meet such expectations, therefore the following section is devoted to analyzing the mandatory nature of this audit.

The audit, your progress towards environmental auditing

When evaluating the antecedents of the audit activity, the works of Báez, del Toro and Others are taken as references, all of them approach in different ways the antecedents of the development of the audit activity, Báez slightly mentions the observation and confirmation techniques, associated with Inventories and accounts receivable respectively, and Holmes, is limited to its purposes and classes.

Almost since the owners assigned another person to manage their property, there has been an audit, which made it essentially a control against embezzlement and non-compliance with the rules established by the owner, the State or others.

As a consequence of the development produced by the Industrial Revolution of the 19th century, it emerges as an element of financial control and analysis. The first association of auditors was created in the year 1851 in the city of Venice in Italy, then in that same century events occurred that facilitated the development of the profession, so in 1862 the audit was recognized as a profession for the first time under the Law British Public Limited Companies, but it was not until 1900 that fraud detection was proposed as a goal; going in the first half of the 20th century to dictate financial statements in order to assess whether companies provided the reality of their financial situation; In 1867 the Companies Law was passed in France, which recognized the External Auditor or Auditor.

In England in 1879 the obligation to carry out independent audits of banks was adopted, in 1880 the title of Chartered Accountants or Certified or Certified Accountants was legalized in England, in 1882 the role of auditors and in 1896 the State of New York had designated as certified public accountants those who had complied with state regulations regarding the proper education, training, and experience to perform the functions of Auditor.

Towards the end of the 19th century and the beginning of the 20th century, many English auditors came to the United States of North America who came to audit-review the different interests in this country of English companies, thus giving rise to the development of the profession in North America. America, the American Institute of Accountants having been created in the early years of that century.

It is appropriate to consider that the auditing and accounting activities that were carried out during this period were not covered by Auditing Standards or Generally Accepted Accounting Principles.

The audit in Cuba

The historical background of the Audit in Cuba has its starting point in the republican era and the author considered grouping it into three periods, which are described below:

First Colonial - Republican period (1909-1958): Audits are carried out to identify the results obtained and determine the correct amount of the tax to pay to the Spanish government. These responded to the interests of Spain.

The financial audit is also established, which responded to the interests of North American headquarters and was carried out by independent auditing firms that had, among other functions, to do tax audits and internal audits, all this in the early days of the Republic, at the time Where also the Ministry of Finance arises, created by the Organic Law of the Executive Power of 1909, which begins the supervisory function.

In late 1950, in accordance with the provisions of the Constitution, the Court of

Accounts, with the functions of supervising the assets, income and expenses of the State, the execution of the State Budgets at all levels, as well as ensuring compliance with the laws and other provisions related to taxes, duties and contributions.

Issued in June 1956, by the then College of Public Accountants of Cuba, Bulletin No. 2, published in February 1959, called "Basic Principles Governing the Intervention of Financial Statements" which also presented the approved standards. Second epoch: With the triumph of the Revolution, on January 1, 1959, a change began in the socio-economic structure of the country, which led to an accelerated transformation in the organization of the state apparatus.

The practice of auditing in the first years of the revolutionary process was very weak and was carried out by auditors from the Ministry of Finance and the National Bank applying cash and account programs, in companies and centers intervened by the Court of Accounts. The Court of Accounts ceased its functions in December 1960.

At this time, the teaching of accounting and auditing was drastically decreased in the country's universities, as well as in medium-level technology centers.

In 1961, Law 943 on the Verification of State Expenditures was promulgated and the Verification Directorate was created in the Ministry of Finance, in charge of fulfilling the inspection functions. Commander Ernesto Che Guevara created a strong auditing apparatus and used it as management instrument to check a large number of entities; Also constituting Audit Units.

Through Law 1323 of 1976, the State Finance Committee is created, which includes a Verification Directorate and fulfills the leading function in the area of State Auditing. Current era: In 1990, when the contracts with the foreign entities LTI and Sol Meliá were signed and in 1991 with the Spanish firm OASIS, for the administration of several hotels in Varadero, the need to audit the financial statements of the administrations was manifested. of the hotels by independent audit firms, since the administration contracts required this requirement for the liquidation of the results of each fiscal year and the fulfillment of the administration's obligations established in the contract.

Thus, on December 31, 1991 and 1992, the first audits of the Financial Statements were carried out with the issuance of an Opinion, with Cuban auditors in independent auditing firms, the first (Sol Palmeras and Tuxpan Hotels) as International Law Firm and the subsequent ones (Hotels Bellavista, Atabey, Siboney, Cuatro Palmas, Internacional and Cayo Largo del Sur) as the International Center of Havana.

In 1995 the National Audit Office (ONA) was created to execute the functions that, in relation to this matter, were assigned to the Ministry of Finance and Prices through Agreement No. 2914 of the Executive Committee of the Council of Ministers, as well as the that, under the specific legislation on auditing, they were given to said body.

The aforementioned Office carried out the functions assigned to it until April 25, 2001, when by Decree Law 219 the Ministry of Audit and Control was created as a Body of the Central State Administration, in charge of directing, executing and controlling the application of the State and government Policy regarding Government Auditing, Oversight and Government Control; as well as to regulate, organize, direct and control, methodologically, the National Audit System.

This Ministry works until August 1, 2009, when the National Assembly of People's Power establishes, through Law No. 107, the General Comptroller of the Republic of Cuba with the objective and fundamental mission of assisting the National Assembly of the Popular Power and the Council of State, in the execution of the highest control over the State and Government organs; for this reason, it proposes the State's comprehensive policy regarding the preservation of public finances and economic-administrative control, once approved, directing, executing and verifying compliance, as well as methodologically directing and supervising the National Auditing System; execute the actions it deems necessary in order to ensure the correct and transparent administration of public assets;prevent and fight corruption.

Currently the audit in Cuba has stopped evaluating only the accounting activity, in recent years it has crossed the limit of the review of accounts and internal control. Currently, tax verifications, management analysis and financial opinions are carried out in the country in the new economic associations with foreign capital; Likewise, the internal audit is deepened and perfected, assuming an important role within the set of economic changes at the business level.

In Cuba, the auditors were affiliated with the defunct Ministry of Audit and Control (MAC), currently the General Comptroller of the Republic (CGR), the Bodies of the Central State Administration (OACE), and Consultoría Económica SA (CANEC), and in general, to the National Association of Economists and Accountants of Cuba (ANEC).

The environmental audit arises as a result of the growing concern about environmental problems and the role assumed by companies in terms of their responsibility. It is a powerful tool, capable of evaluating and laying the foundations for a careful policy with the environment, taking into account the environment that surrounds industries.

Thus, to analyze the environmental risks that the performance of an activity could generate and evaluate its impact, environmental audits are carried out in order to formulate programs that allow compliance with current legislation on these issues in each country, activity sector, region, etc.

The companies that want to know and analyze their situation with respect to the environment carry out audits of this type, whether internal, carried out by the company itself or external, requested specialized organizations.

The environmental audit then becomes a management instrument that guarantees the correct operation of the policies adopted on the environment, providing benefits both to the company itself and to the natural environment in which it operates.

As a tool, it is increasingly essential within business management if you want to ensure that the activities implemented by companies do not contribute to environmental damage.

In many cases, the environmental audit is even mandatory, depending on current legislation.

The audit must know how to combine the priority objective of the company, that of obtaining benefits, with that of protecting the environment.

The sustained economic development of organizations must be compatible with the conservation of the environment and for this it is necessary to achieve a balance between the two.

Perhaps the main difference between other types of company audits has been developing throughout the work and the environmental audit, is the multidisciplinary nature of the latter, which allows the efforts of a large number of professionals, including lawyers, to be combined. technicians and scientists. Professionals must form a work team that allows the study of the environmental impact caused by the company in order for its organization and operation to comply with current legal regulations. Broadly speaking, the tasks to be carried out by this team are those of preliminary investigation, subsequent evaluation, diagnosis, opinion and proposals.

The environmental audit in Cuba

In Cuba, the environment constitutes a new strategic factor that must be taken into consideration in the planning of short, medium and long-term actions and must be integrated into the entity's management, In the bibliographies and legal regulations reviewed by the author, it is corroborated that no guidelines have been designed to verify and control the registration of economic events with an environmental focus, since there is no rule establishing the procedure for the insertion of accounts. nor the registration of costs and expenses with an environmental focus, is only discussed in Decree No. 281 of the State Council in its chapter VIII Environmental management system, in article No. 481: “The company, in the framework of the environmental management program, plans the expenses associated with the investments and the maintenance and rehabilitation work required to comply with the proposed strategic environmental objectives.

On the other hand, article No.482 states that the company, to continue determining opportunities with a view to increasing its efficiency, analyzes the reduction of expenses from the better use of resources used in production and service processes (water, raw materials, supplies, energy) and the reuse of residuals and of the income obtained from the recycling of residuals and from the increase in the quality of the products.

In the Environmental Management System, a specialized accounting and finance area is not identified to offer information that allows establishing strategies for regulation and control regarding the environmental accounting system and auditing as its control tool for decision-making in the processes of the organizations, which in their development are obliged to protect the environment. It is not very common practice to verify the treatment of environmental activities when evaluating the economy, efficiency and effectiveness with which the administration works.

The environmental accounting audit as a control tool

Firstly, it is necessary to differentiate between the financial audit, the purpose of which is to verify whether the Annual Accounts express the True Image of the assets and financial situation of the company and the environmental audit, the purpose of which is to prove compliance by the company with the environmental legislation that is applicable to it.

The main risks that companies have related to their environmental behavior are:

Failure to comply with legal regulations that may give rise to penalties and fines. Risks for accidents not covered by insurance. Liabilities for litigation and claims. Feasibility of the company and of products and processes. Investments necessary to solve problems. Negative advertising. administrators.Union and personnel lossCollectibility of the lower value of the asset that guarantees the debt.Value of investments made in subsidiaries by their environmental component.

Among the above risks, some affect the preparation of the Annual Accounts on which the auditors express their opinion, others to the advantages, competitive and operational, and others to the responsibility of the administrators. So we have

Liabilities not reflected in the annual accounts: Fines, sanctions and final judgments not settled or insured. Contingencies for litigation and unresolved claims. Continued management shown by financial resources to make mandatory investments, the closure of activities or processes by the Administration (Lack of activity license, territorial permits), as well as the loss of market for not being able to sell the products. (Unfair competition, loss of market share), on the other hand, the expenses necessary to continue carrying out the activities (dumping fee, cost of the waste and sanitation manager, special maintenance plans to meet insurance requirements, etc.). Unrealized asset provisions, referring to inventories that become obsolete due to legal requirements,change of processes, rejection of the demand, fixed assets with useful lives different from those anticipated due to replacement needs or restriction in the processes,

The environmental area is a global risk area since it is a combination of three other risks, namely:

Risk that an accounting balance or type of transaction contains significant errors, before considering the effectiveness of internal controls. Risk that internal controls do not detect or prevent errors in time.  Risk that the auditor will not detect significant errors in the financial statements.

And there is also a risk due to the possibility that companies hide or downgrade provisions and contingencies, therefore it is necessary to determine if the company is at inherent risk. As warning signs would be:

Participations in merger or sale operations of companies. Acquisition of parcels at a price significantly lower than the market. Cancellation of sale of fixed assets, due to the existence of unregistered environmental liabilities. Partial sale of assets. Carrying out estimates of cleaning costs. or replacement. Failure to pay mortgage payments that do not entail the seizure of the affected assets. The cause would be not to assume environmental costs higher than the attachable good.

Therefore, as a summary, the environmental audit report has two basic objectives .

a.- A general objective: that seeks to verify that all environmental situations are included in the annual accounts, which have been prepared in accordance with generally accepted accounting principles and standards and that contain all the necessary and sufficient information for their correct understanding and interpretation.

b.- Specific objectives where the auditor must ensure: if the environmental regulations are met, as well as the annual accounts, reflect the significant events of this nature, which are correctly valued, are adequately presented and are uniform, the events after The closure that may have occurred on this matter are duly collected, as well as the possible responsibilities are duly covered, also that the internal control procedures are correct and work satisfactorily. Another important question to ask is that the results of these audits are going to be put in the hands of the public, that is, to what extent is the company willing to provide more information than is strictly mandatory.Among the information that could be put in the hands of the public would be:

The quality of the work environment, that is, the safety, morale and productivity of workers. The impact on the environment of: The inputs used, production processes and transport systems. Efficiency in the use of natural resources at The incorporation of technological advances and achievements in this field -And the evolution in the levels of environmental risks.

Accounting is a useful tool that contributes to the need to quantify, record and report on natural, financial, human, technical, service, communication resources, as well as costs and liabilities, all related to the environment. For its part, the audit, as an auxiliary tool, provides the degree of certainty and credibility of the elements described to become a guarantor before the entity and society. Definitions about environmental accounting audit are set out below:

The European Commission, (1996) alleges that it is a management tool that includes a systematic, documented, periodic and objective evaluation of the performance of organizations, management and equipment (equipment) with the objective of environmental practices and evaluation of compliance with directives of the company or that contributes to the demands of regulatory bodies and applicable standards.

According to Malheiros Telma & María Marques - Brazil. (2002) is an orderly procedure whose basic objectives are the periodic and occasional examination and evaluation of the legal, technical and administrative aspects related to the environmental activities of a company, as an instrument for analyzing its environmental performance and the actions related to these aspects.

The definition of audit, from the American Accounting Association (2002) states that it is a systematic process to obtain and evaluate evidence in relation to a verifiable statement about activities and events to make sure of the degree of correspondence between the statement and the established criteria and then communicate the results to interested users.

In order to reconcile economic development and respect for the environment in the business sector, environmental management must be included in global management. There is a difference between the financial audit, the purpose of which is to verify whether the annual accounts express the true image of the assets, and of the financial situation of the company, and the environmental accounting audit, which is intended to confirm compliance by the company with the legislation and the environmental accounting act that is applicable.

The Environmental Protection Agency of the United States (2013) defines that… ”The environmental audit is aimed at capturing, recording, reporting and reporting results… ¨. Likewise, according to its meaning, it has been defined as a methodological, systematic, review process that involves a documented, periodic and objective evaluation in organizations… ”.

In Cuba, the environment constitutes a new strategic factor that must be taken into consideration in the planning of short, medium and long-term actions and must be integrated into the entity's management, which is established in the Regulation of Law No.107 / 2011 of the General Comptroller of the Republic (CGR). In its Third Section, TYPES OF AUDITING, article 43, paragraph h) defines that the environmental audit is the process to verify the use, administration, protection and preservation of the environment and natural resources with the objective of evaluating compliance with the regulations and principles that govern its control and, when appropriate, quantify the impact of the deterioration caused or that may occur.

We uphold the criterion that, from the accounting science to be audited by the CGR, if organizations do not have an information system that plans and controls economic events focused on the environment, since these costs and expenses are registered in other ordinary concepts. of costs and expenses of the existing accounting information system. If the insertion of environmental accounts and the classification of environmental costs are lacking in the financial statement, then how can the impact of the deterioration caused or that may occur be quantified, as stated in the concept given by Law No.107 / 2011 of the CGR.

This author believes that the environmental accounting audit is a systematic and documented verification process, in order to obtain and objectively evaluate the information, records, as well as environmental economic facts, which are verifiable to determine if the system accounting officer related to the environment complies with the audit criteria to communicate the results of this process to the client.

The environmental accounting audit is a management tool that includes a systematic, documented, periodic and objective evaluation of how the company complies with the purpose of safeguarding the environment, on the one hand and on the other, how it plans, records, analyzes and controls the resources necessary for the prevention, evaluation, mitigation, failure and / or rehabilitation of the environment, both internal and external to the company.

It is an internal evaluation that allows obtaining objective and evident information on how the environmental accounting situation is progressing and contributes to a greater environmental awareness. At the same time, it covers the tasks of information search and data collection, visits and meetings, sampling and material balancing; Its main objective is to collect sufficient, reliable, relevant and useful information.

The awareness of environmental responsibility by entities in the execution of their productions or services, has introduced the problem of the environment in decision-making. In this way, environmental issues have become essential in the daily activities of entities.

The audit is a tool for the control of environmental performance, which provides us with the knowledge of company management focused on the process of continuous improvement, in which those related to environmental management can be included, specifying where it is being applied and how this improvement is manifested. Environmental information plays an important role in meeting such expectations; for this reason, the following section is devoted to analyzing such purposes.

Environmental information as a company resource. Its voluntary or mandatory nature

Environmental information is one of the basic elements to cover the expectations of the company associated with this problem. Hence, assuming the criteria of Larrinaga (2002), a conceptual framework of the same is presented with the following structure:

Conceptual framework scheme for environmental financial reporting

The conceptual framework presupposes that the evaluation of the performance of organizations in the environmental field must also be based on basic benchmarks, such as those provided by a deductive logical model, for which reason it has been deemed convenient for the understanding of the same to present to Below are the essential elements that such a structure must contain:

Social and economic environment

The environmental financial information published by entities is generally influenced by the socio-economic environment in which they are immersed. This explains important changes that have been observed in recent years in this information, in addition to global pressure for the preservation of the environment and sustainable development.

objective

It is unquestionable that the definition of the objectives of the environmental financial accounting is linked to the informational need of the user groups to which it is directed, so the objective of the environmental financial information is to allow the entity's senior management to measure, evaluate, control and communicate its environmental performance over time.

Users

The very definition of the objective of environmental financial accounting is inescapably linked to the agents who use this information. In this sense, the concept of users of environmental financial information has been broadened, as they pass to evaluate environmental impacts as one more element of their decisions. Basic assumptions

They are great rules that govern the preparation of environmental financial information. In accordance with a logical - deductive accounting model, it is necessary to recognize the fundamental rules that govern the preparation of information in accordance with the established objectives.

Qualities of environmental information

It refers to the characteristics that the environmental financial information will have, which will allow achieving the objective established for environmental accounting. In this regard, the author of the present investigation considers that reference should be made to the nature of this information, that is, voluntary, involuntary and obligatory.

Elements of environmental information

From the field of environmental accounting, the elements involved in environmental financial information are: assets, liabilities, equity, expenses and income.

Environmental information is the preparation and provision by management of information for external consumption on the state and environmental performance of the organization. This information can be presented in a separate report and can be clearly distinguished from traditional accounting. Larrinaga, (2002) The information provided by companies must meet a series of qualities that allow it to achieve the objective established for environmental financial accounting. These qualitative characteristics operate as a guarantee that the standards that will guide the preparation of the information control the relationship between the reporting entity and the participants.

The main qualitative characteristics that have been established are: relevance and reliability. Relevance will be conditioned by the ability of this type of information to occupy a preponderant place within the general information system of companies. The reliability of this information will depend on the quantity and quality of it.

Regarding reliability, it depends on a set of secondary qualities that are fundamentally the following:

Valid description of the facts: so that it is carried out in a logical and objective way

Merits: involves reporting activities in accordance with the environmental essence. Not only on environmental investments, but also on the difference between investments made as a consequence of company policy and those resulting from legal renewals.

Neutrality: elaboration of norms that structure the data provided to avoid, for example, confusing a sanction for ecological damages with an environmental expense

Integrity: it involves the communication not only of positive environmental data, but also adverse ones, collecting direct and indirect effects of the activity. A full breakdown of environmental sanctions can allow an adequate judgment of the organization's attitude towards the environment.

Caution: this principle is linked to the ecological precautionary principle, which influences the environmental financial accounting prudent. In this sense, the uncertainty of the environment forces us to estimate future environmental risks and obligations; therefore, the organization must take into account the life cycle of its activities to determine its current economic results. LLull, (2003) In the author's opinion, one of the problems that needs further development is the adaptation of the elements of traditional financial statements to the environmental fact and the configuration of new elements typical of environmental information.

From the field of environmental financial accounting, for the terms of assets, liabilities and expenses, the commonly used definitions exclude part of the environmental problem. We believe that the following weaknesses exist: First, the definition of an asset is linked to obtaining future economic benefits. However, it is not clear that some investments in environmental material assets generate a return for the entity, although the social cost decreases. As a result of the definition of an asset, the treatment of environmental costs tends to be carried out improperly, since a part of them could be capitalized, even if they did not produce income.

Another problem of environmental expenses is their identification and classification for their adequate presentation in the financial statements. The complexity of said expenses influences whether they are grouped into other items or classified as ordinary and extraordinary.

In the definition of a liability, based on the perception of past events, the recognition of future obligations is prevented. Regarding liabilities, the introduction of the obligation assumed by the company should be more clearly reflected. The authors Herrada LLadó, (2006) and García Fronti, (2006) in their research shows that companies often provide confusing information, at best, and misleading, at worst. Nor is there a clear correlation between the provision of environmental information and the environmental performance of companies.

In the analysis of the environmental financial accounting framework, the consideration of this type of information means the extension of the traditional objective of accounting information usefulness.

It is recognized that accounting and provision of environmental information has begun to gain relevance for companies because the way in which the result of an organization's environmental actions affects its financial health is of increasing interest to investors, creditors, government and the general public.

The integration of financial and environmental information has the following benefits:

a) Facilitates the incorporation of environmental information in financial reports and the incorporation of financial information in environmental reports.

b) It allows to interrelate financial and environmental reports effectively.

c) It allows to provide sustainability reports.

d) It allows to economically evaluate everything related to the environment. The integration of this information is recommended because they represent not only a way to increase the accounting of the information that the company provides, but also a way to provide a true image of the financial and environmental situation of the company.

Environmental financial accounting must measure the resources consumed in the production of goods and services for the market and for the achievement of public welfare and, in addition, must measure future resources, in accordance with the agreements established between the administrators of the resources and the responsible for common property.

Organizations must assume greater social responsibilities taking into account the effects that their activities have on the environment. The traditional concept of social responsibility is broadened by integrating environmental variables into the management systems implemented in them, so that these systems enable both the determination of environmental objectives and the actions aimed at achieving them, establishing a Complementarity between the management of human resources and the management of the environment.

The position that organizations adopt with respect to the environment based on their degree of interrelation with it, will condition the information needs to be able to adopt environmental strategies integrated into their global management. In addition, this social responsibility will also condition the quantity and quality of the environmental information that they are willing to prepare and present, so as to reflect the effects of their activities on the environment. Social responsibility will have implications both in the internal sphere of the company and in its relations with external agents. Thus, internally they must develop environmental accounting management and audit systems,that allow the development of action policies aimed at achieving specific environmental objectives, while from the external point of view they must transmit information to the socio-economic agents related to the organization, regarding the situation of the organization with respect to the environment ambient. This double responsibility will imply the establishment of a double flow of information.

Partial Conclusions

The theoretical referent analyzed allows us to consider that there are important gaps associated with the terminological treatment of environmental accounting information, which means that progress in this area continues to be limited.The ability to assume environmental information on a voluntary or mandatory basis will depend on factors, among which stand out: business culture, the willingness of organizations to assume sustainability criteria and also awareness and responsibility for environmental impacts and damages. In the current Cuban context, it is necessary to work with greater emphasis on registration environmental accountant, which enables accounting auditors to assess this problem.

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