Using a sample of 263 financial executives, this study furthers our understanding of the factors that influence the accrual and disclosure of environmental liabilities. It uses the Theory of Planned Behavior (Azjen, 1991) to investigate these discretionary accruals and disclosures as ethical decisions at the level of the individual decision maker. The authors know of no other study that explicitly examines the accrual decision as distinct from the disclosure decision with respect to environmental liabilities. Results indicate that the intentions to accrue and disclose environmental liabilities are significantly related to an individual's attitudes, subjective norms, perceived behavioral control and perceived moral obligation. Findings also suggest that financial executives are more willing to accrue an environmental liability than to disclose it in the notes to the financial statements.