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Investigating international accounting standard setting: The black box of IFRS 6

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  • Cortese, Corinne
  • Irvine, Helen

Abstract

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.

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  • Cortese, Corinne & Irvine, Helen, 2010. "Investigating international accounting standard setting: The black box of IFRS 6," Research in Accounting Regulation, Elsevier, vol. 22(2), pages 87-95.
    • Handle: RePEc:eee:reacre:v:22:y:2010:i:2:p:87-95
    DOI: 10.1016/j.racreg.2010.07.003
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    3. Samira Demaria & Dufour Dominique & Moïse Louisy-Louis & Philippe Luu, 2012. "An exploratory study of the exposure draft of IAS 19 due process," Post-Print halshs-00721326, HAL.
    4. Misund, Bård, 2015. "Accounting for Oil and Gas Exploration Activities: A Triumph of Economics over Politics," UiS Working Papers in Economics and Finance 2015/15, University of Stavanger.
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    6. Samira Demaria & Dominique Dufour & Moïse Louisy-Louis & Philippe Luu, 2012. "An exploratory study of the exposure draft of IAS 19 due process," Post-Print hal-00690943, HAL.
    7. McEnroe, John E. & Sullivan, Mark, 2013. "An examination of the perceptions of auditors and chief financial officers regarding principles versus rules based accounting standards," Research in Accounting Regulation, Elsevier, vol. 25(2), pages 196-207.
    8. Okamoto, Noriaki, 2017. "Norm entrepreneur lobbying and persuasion: A case study involving the IASB's modification of an exposure draft," Research in Accounting Regulation, Elsevier, vol. 29(2), pages 129-138.
    9. Urska Kosi & Antonia Reither, 2014. "Determinants of Corporate Participation in the IFRS 4 (Insurance Contracts) Replacement Process," Accounting in Europe, Taylor & Francis Journals, vol. 11(1), pages 89-112, June.
    10. Power, Sean Bradley & Cleary, Peter & Donnelly, Ray, 2017. "Accounting in the London Stock Exchange's extractive industry: The effect of policy diversity on the value relevance of exploration-related disclosures," The British Accounting Review, Elsevier, vol. 49(6), pages 545-559.
    11. Corinne Cortese & Lee Moerman & Millicent Chang, 2022. "Is the extractive industries standard still fit for purpose?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2807-2838, June.
    12. Bård Misund, 2017. "Accounting method choice and market valuation in the extractive industries," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1408944-140, January.
    13. Christa Van der Walt & Banele Dlamini & Danie P Schutte, 2023. "Exploring the Accounting Treatment of Exploration and Evaluation Activities in the Extraction Industry in South Africa and Australia," International Journal of Economics and Financial Issues, Econjournals, vol. 13(6), pages 30-34, November.

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