The s havewitnessed growth in, green consumerism, green ethical investment trustsand general environmental concerns that have lead to specific changesin business practice and its environment and it can be expected thatthese changes will affect the accounting profession , p. . The Institute of Chartered Accountants in England and Wales ,p. points out that â?? where environmental factors will impact on acompanyâ??s policy and activities, and will impose costs on the company,or affect its asset values or liabilities, actual or contingent, thefinancial consequences need to be accounted for or reported inaccordance with existing accounting requirementsâ?.In the past,consumers have demanded traditional information to make their economicchoice in areas such as, value, price, quality, and service. Nowconsumers have new values such as, the impact of products on theenvironment, environmental protection, â?¦, etc. and they needinformation about those values to express their choice and make themarket work effectively , pp. â??. argue that investors prefer not to deal with companies, which have abad reputation or do not have a socially responsible attitude towardsthe environment.The McFarlane report ,paragraph . states that â??auditors are already involved in assessingenvironmental issues when auditing financial statementsâ?. ,p. points out that â??the importance of environmental issues isincreasingly recognised. They often have implications for business andcannot be ignored by auditorsâ?. point out that accountants are becoming more involved in variousaspects of the environmental agenda and the notion of auditing isgaining a wider currency on the environmental agenda than as applied toonly attestation of financial statements. suggest that every accountant and auditor should be able to evaluatethe consequences of environmental issues in relation to accounting andauditing practices in the financial statements audit. Achieving thiswill require changes in the education and training of accountants,including such areas as the treatment of environmental costs and risksin financial statements. points outthat environmental matters will be important for some entities andauditors should have a general awareness of the impact that suchmatters may have on financial statements.Accountants andauditors are now involved in reporting on corporate environmentalissues, particularly evaluating contingent liabilities, determining theincentive effects of the environmental movement on environmentalmanagement, and providing decision-makers with quantitative informationon environmental performance .Accountants and auditors will increasingly find themselves involved inareas such as: dealing with new types of taxes, having to take newfactors into consideration in investment appraisal, helping cost outnew pollution control methods, examining the feasibility of replacingmaterials used with sustainable resources and exploring recyclingopportunities, and helping estimate the impact of green consumerpreference in existing new markets ,pp. â??. A number of arguments have addressed the need for wideningthe scope of the financial auditing profession to encapsulateenvironmental issues. The question is whether the auditing professionis able to cope with this new responsibilities for environmental issuesand to contribute to meeting the need for environmental accountability.The central proposal here is that the financial audit profession canmake a significant contribution to the area of environmental auditing.This proposal leads to asking about the ability of financial auditorsto accept environmental challenges and participate in environmentalauditing.