Environmental accountingIssues，reporting and disclosure Abstract With cleanup costs of hazardous wastes expected to run as high as $500 billion to $1 trillion over the next 50 years, environmental reporting and disclosure by firms in the United States during the 2000s will become more prolific. This manuscript seeks to provide an understanding of the magnitude of environmental issues, a brief history of the EPA, discussion of environmental regulatory acts and enforcement, and reporting and disclosure requirements by the SEC and FASB. IntroductionOne of the biggest concerns that firms will face in the 2000s will be reporting and disclosing of environmental issues. By early 1996, the Environmental Protection Agency (EPA) had identified over 36,000 hazardous waste sites in the United States, and the identification of additional sites continues. The EPA estimates that total cleanup costs of all identified hazardous waste sites could run as high as $500 billion to $1 trillion over the next 50 years (Jensen and Unger 1991). Interestingly, some of the largest public corporations in the United States have been identified by the EPA as responsible parties. The 1,405 most seriously contaminated properties have been placed on the National Priorities List (NPL), and are commonly referred to as Superfund sites. From these Superfund sites alone, the EPA has identified more than 15,000 Potentially Responsible Parties (PRPs) (Jensen and Unger 1991). (A PRP is a person or entity designated by the EPA as potentially responsible for the costs incurred in cleaning up the site(s).) The average cost to clean up a Superfund site is estimated to be $35 million (Dixon, Drezner, and Hammitt 1993); more troublesome sites could run as high as $1 billion each (Jensen and Unger 1991). To date, only about 498 of these Superfund sites have been cleaned up totally. In light of time and resource commitment costs to clean up these hazardous waste sites, the potential impact on some specific entities could be enormous. Accordingly, it is logical that the public would want to know about the existence of any environmental issues for which a reporting entity might be held responsible. With this in mind, the underlying purpose for this manuscript is to provide an understanding of the magnitude of environmental issues in the United States, a brief history of the Environmental Protection Agency, environmental regulatory acts and methods of enforcement by the EPA, and current disclosure requirements for corporations by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB). Magnitude of Environmental PollutionEnvironmental pollution in the United States is a major issue. In assessing environmental pollution, specifically hazardous wastes, in this country, the EPA made the following statements: There are approximately 240, 000, 000 people in the United States. Try to imagine a ton of hazardous waste piled next to each of them, with another ton added each and every year. Hazardous waste is produced in this country at the rate of 700,000 tons per day. Thats 250 million tons per year-enough to fill the Superdome in New Orleans 1,500 times over. (Environmental Protection Agency 1987, p. 14) Although it is true that the amount of hazardous waste is large, most of this waste is not dumped directly into the environment. Given sufficient incentives, most of the hazardous waste produced probably could be recycled as energy sources or be chemically stabilized. However, in the past, public corporations were not as knowledgeable about the impact of these hazardous wastes on humans as they are now. Additionally, they lacked sufficient incentives to, and were not required to, properly dispose of hazardous materials. Today, these companies are being forced to address their lack of foresight by acceptance of responsibility and, therefore, liability for past wastes. This liability ultimately leads to disclosure by public corporations. The EPA is the principal federal agency responsible for identifying the companies to be held responsible for these past wastes. History of the Environmental Protection AgencyPresident Richard M. Nixon created the Environmental Protection Agency (EPA) as an independent agency of the United States government by an Executive Order entitled Reorganization Plan 3 of 1970. While most federal agencies have been created by Congress, the creation of an agency by executive order was unique and implied lack of legislative support. Designed to ensure the protection of national environmental health, the EPA has not always received meaningful support from Congress. Early budgets were meager, and the agencys main headquarters in Washington, D.C. was located in an old condominium。 (once owned by Vice-President Spiro Agnew, who had trouble selling it through regular real estate channels). Although it received minimal support originally, since its creation two decades ago,