Identifying Methods for Improving The Effectiveness of Audit Policies and Laws

EPA Grant Number: R829686
Title: Identifying Methods for Improving The Effectiveness of Audit Policies and Laws
Investigators: Stretesky, Paul B.
Institution: Colorado State University
EPA Project Officer: Hahn, Intaek
Project Period: July 27, 2002 through July 27, 2004 (Extended to August 31, 2005)
Project Amount: $139,173
RFA: Corporate Environmental Behavior: Examining the Effectiveness of Government Interventions and Voluntary Initiatives (2001) RFA Text |  Recipients Lists
Research Category: Environmental Justice


Environmental audit policies and laws waive penalties, reduce penalties, or grant privilege against disclosure of self-audit information in administrative or judicial proceedings when regulated entities voluntarily discover, promptly disclose, and correct environmental violations. Recent research suggests that audit privilege and immunity legislation and penalty mitigation policies can be implemented more effectively and efficiently. To improve audit laws and policies, regulatory agencies need information on factors associated with the disclosure of environmental violations. The main objective of the proposed study is to determine if variables that measure sanction certainty, sanction severity, and compliance assistance are associated with the odds of disclosing a violation under the Audit/Self-Policing Policy. If this research finds that multiple factors are related to the odds of disclosure, the study design will be able to identify the one that is most important in determining disclosure.


A case-control design is used to study companies regulated under federal environmental laws in order to determine if there is an association between reporting under the Audit Policy and (1) the rate of inspections at company facilities, (2) the rate and type of past enforcement actions taken against the company, (3) the rate and type of enforcement actions taken at facilities that are geographically proximate to company, (4) the rate and type of enforcement actions taken against companies in the same industry, and (5) the presence or absence of compliance assistance efforts such as mass mailings and company requests for information. The event group will consist all 690 companies that disclosed an environmental violation under the Audit Policy between January 1999 and December 2000. The control group will be composed of a simple random sample of 690 companies that did not use the Audit Policy, but were discovered to have violated federal environmental laws between January 1999 and December 2000. Internal and external variables that have been identified as influencing corporate behavior, but are beyond the ability of regulatory agencies to control are considered to be potential confounders. A multivariate model estimating odds ratios is developed to assess the associations between various governmental interventions and disclosure.

Expected Results:

The information from this research will provide a database of information relating to disclosure of environmental violations. The models developed will facilitate an understanding of which governmental interventions may best be used to increase the effectiveness and efficiency of audit policies and laws.

Publications and Presentations:

Publications have been submitted on this project: View all 3 publications for this project

Journal Articles:

Journal Articles have been submitted on this project: View all 1 journal articles for this project

Supplemental Keywords:

public policy, decision-making, cost-benefit, sociological, RFA, Scientific Discipline, Sustainable Industry/Business, Corporate Performance, Economics and Business, Social Science, Environmental Law, compliance assistance, corporate environmental policy, enforcement strategy, policy making, corporate compliance, government intervention, environmental compliance determinants, information dissemination, audit policies, enforcement impact, environmental behavior

Progress and Final Reports:

  • 2003 Progress Report
  • 2004
  • 2005
  • Final Report