With the growing concern on sustainable development, the environmental issues and operating performance are very important factors to the enterprises. Recently, the environmental accounting system is carried out in many countries. To disclose the costs of environmental activities on their financial statements will make managers understand the firm’s environmental costs. Therefore, managers can take environmental accounting into consideration when making strategic decisions, so that it may help to create maximum profit and make companies more competitive. Due to European Union has officially conducted the regulations of WEEE and RoHS directives since 2005, any electronic and electric machinery companies exporting goods to European Union must comply with these new regulations. Traditional accounting does not credit or debit all the environmental accounting items, therefore, it can not accurately reflect the environmental activities that the industries are engaged in. However, with the new directives imposed on EU’s imports and e-wastes, suppliers are required to disclose environmental activities on their financial statements to make their financial statements more transparent to fulfill the EU’s environmental directives. The focus object of this study is electronic and electric machinery industries. For the purpose of establishing a holistic environmental accounting system, this study uses questionnaire to explore the environmental expenditure and correlative questions. This study also uses methods of Confirmatory Factor Analysis (CFA) and Structural Equation Model (SEM) to find the relationship between all variables with latent variables. The empirical results are summarized as follows: 1.There is positive impact of the process of purchasing/manufacturing materials upon inspecting expenditure. 2.There is positive relationship between product designing and inspecting expenditure. 3.There is positive relationship between inspecting expenditure and recycling spending.