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A critical analysis of the use of accounting standards’ comment letters as lobbying tools by extractive industry firms

A critical analysis of the use of accounting standards’ comment letters as lobbying tools by extractive industry firms

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Authors

  • Ayodele Oshokamere Asekomeh
  • Alex Russell
  • Heather Tarbert

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Info

Original languageEnglish
Pages55–76
Number of pages22
JournalPetroleum Accounting and Financial Management Journal
Journal publication date2006
Volume25
Issue3
StatePublished

Abstract

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 two methods are conceptually different and can produce radically divergent reported results. Since the accounting method adopted determines the timing, recognition, and amortization of exploration and development costs, it follows that method of choice inherently confers some discretionary control over capitalized expenditures and thereby empowers managers to engage in income management.

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