Digging deeper: uncovering constituent discourse in the International Accounting Standard setting process for the extractive industries (original) (raw)
Related papers
Accounting Forum, 2010
This paper illustrates the influence of powerful players in the setting of IFRS 6, a new International Financial Reporting Standard (IFRS) for the extractive industries. A critical investigative inquiry of the international accounting standard setting process, using Critical Discourse Analysis (CDA), reveals some of the key players, analyses the surrounding discourse and its implications, and assesses the outcomes. An analysis of small cross-section of comment letters submitted to the International Accounting Standards Committee (IASC) by one international accounting firm, one global mining corporation and one industry group reveal the hidden coalitions between powerful players. These coalitions indicate that the regulatory process of setting IFRS 6 has been captured by powerful extractive industries constituents so that it merely codifies existing industry practice.
2006
have brought the reporting practices of the international oil and gas industry into the public arena. Current international GAAP allows companies to choose either the full cost (FC) or the successful efforts (SE) method to report the results of their exploration and production activities. These methods are conceptually different and produce radically divergent reported results. Consequently, it is not surprising that recently the predecessor of the International Accounting Standards Board (IASB), the IASC, published an issues paper (IASC, 2000) that highlighted matters requiring resolution in order to develop a substantive accounting standard for the extractive industries. Its main purpose was to encourage convergence on a single historical cost accounting method for the extractive industries. Since the accounting method adopted determines the timing, recognition, and amortization of exploration and development costs, it follows that method choice inherently confers some discretionary control over capitalized expenditures and thereby empowers managers to engage in income management. This research does not attempt to judge whether this empowerment is beneficial for the industry or for society. Its importance is that it formally tests for lobbying behavior that maintains this empowerment. Standard setters and the market must then consider the consequences of this result. In addition, it provides a basis for further research into the income management practices of the industry.
Standard Setting for the Extractive Industries: A Critical Examination
2007
This study identifies the players involved in the international accounting standard setting process for the extractive industries. Publicly available data is used to expose connections between key constituents involved in the process, to enhance understanding of how the international accounting standard setting process occurred, and to identify future research possibilities.
Rhetoric in international standard setting process: constructing accounting reality
2013
The paper seeks to explore in depth the ways in which rhetorical strategies are employed in the international accounting standard setting process. The study proposes that rather than simply detailing new accounting requirements, the texts and drafts of accounting standards are artefacts, i.e. deliberately and carefully crafted products, that construct, persuade and encourage certain beliefs and behaviours. The persuasive and constructive strategies are also employed by the constituents submitting comment letters on the regulatory proposals. Consequently, the international accounting standard setting process is an 'interactive process of meaning making' (Fairclough, 1989). The study regards accounting as a social construct based on intersubjectivity (Searle, 1995; Davidson, 1990, 1994) and posits language as a constitutive factor in the process (Saussure, 1916; Peirce, 1931-58). This approach to the use of language and the role of rhetoric as a persuasive tool to convince others to our perception of 'accounting reality' is supported by the sociological work of Bourdieu (1990, 1991). Bourdieu has drawn our attention to how language becomes used, controlled, reformed and reconstituted by the social agents for the purposes of establishing their dominance. In our study we explore in particular the joint IASB and FASB proposals and subsequent regulations on the scope of consolidation and relevant disclosures that address issues of offbalance sheet financing, a subject that is very timely and of great topical importance. The analysis has revealed sophisticated rhetorical devices used by both the Boards and by the lobbyists. These reflect Aristotelian ethos, pathos and logos. The research demonstrates that those using accounting standards as well as those reading comment letters on the proposals for new standards should be aware of the normative nature of these documents and the subjectivity inherent in the nature of the text.
The hollow promise of an accounting standard setter
The hollow promise of an accounting standard setter Abstract Purpose -This paper applies a power framework to critically analyse the international accounting standard setting process for the extractive industries. Design/methodology/approach -Publicly available data, including comment letters, annual reports, company websites, and IASC/IASB pronouncements, is used to make connections between the key plays involved in the international accounting standard setting process for the extractive industries. Findings -Lukes' (1974) conception of power is used to explain the community of interests that developed between the IASC/IASB and extractive industries constituents. This community of interests is shown to have enabled the extractive industries to mobilise its power to paralyse the standard setting body and secure favourable regulation. While the politicisation of accounting standard setting is widely acknowledged, the revelation that economically dominant groups can covertly wield such power is a sobering one in the light of the worldwide promotion and adoption of International Financial Reporting Standards. Originality/value -This paper contributes to understanding of the presence of power in the international accounting standard setting process and how it is mobilised by key constituents.
Investigating international accounting standard setting: The black box of IFRS 6
Research in Accounting Regulation, 2010
This paper examines the role of powerful entities and coalitions in shaping international accounting standards. Specifically, the focus is on the process by which the International Accounting Standards Board (IASB) developed IFRS 6, Exploration for and Evaluation of Mineral Resources. In its Issues Paper, the IASB recommended that the successful efforts method be mandated for pre-production costs, eliminating the choice previously available between full cost and successful efforts methods. In spite of the endorsement of this view by a majority of the constituents who responded to the Issues Paper, the final outcome changed nothing, with choice being retained. A compelling explanation of this disparity between the visible inputs and outputs of the standard setting process is the existence of a "black box", in which powerful extractive industries entities and coalitions covertly influenced the IASB to secure their own ends and ensure that the status quo was maintained.
Accounting for the Extractive Industries: Controversies and a Need for Harmonisation
Energy Research Journal
The oil and gas industry is international in nature and being operated, in most, by multinational companies. However, accounting for the activities of the oil and gas industry is being practiced by using different methods. These methods produce incomparable results which makes it hard for users of thes companies' accounts to make investments decissions. In this paper, we demonstrate the differences in accounting practices by oil and gas industry via an extensive literature review. Historically, there has been a number of attempts by accounting bodies to harmonise accounting practices by extractive industries, howeever these attempts have not been successful. We highlight the historical controversies sourounding accounting for the oil and gas industry and we make a call on the International Accounting Standard Board to produce a comprehensive accounting standard for the extractive industries in general, and the oil and gas industry in particular. Such a standard would unify accounting practices by oil and gas companies and act as a common language that companies use when preparing their accounts.