Providing reliable information to clients: The case of environmental remediation

Abstract

This article provides an overview and discusses the implications for the recognition, measurement, presentation, and disclosure requirements for environmental remediation liabilities. The overview and discussion is based upon the American Institute of Certified Public Accountants' Statement of Position (SOP) 96-1 “Environmental Remediation Liabilities.” The article concludes with a discussion of the CPAs reporting responsibility and related issues with respect to this major contemporary issue. A primary goal of CPA firms is to provide quality service to clients, In the realm of financial reporting, quality service means providing clients with reliable information. An increasing number of small and large businesses are exposed to high costs and large potential liability for cleanup of environmentally hazardous material. Certified public accountants who provide compilation, review, or audit services with respect to a non-public entity's financial statements need to be aware of the disclosure and reporting implications of companies confronted with disposal and cleanup of hazardous material.