Is the extractive industries standard still fit for purpose?

Cortese, Corinne; Moerman, Lee C; Chang, Millicent

doi:10.1111/acfi.12893

Cited by 6 publications

(7 citation statements)

References 20 publications

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“…In addition, the prevalence of greenwashing, together with a lack of efficacy in the calculative properties of accounting in EIs, render accounting numbers on the balance sheets uncertain (Cortese et al, 2022), which implies a high level of risk. Quantification, as a task of translation (Latour, 1987), is also likely to create its own ambiguity (Robson, 1992).…”

Section: Communicative Dimension Of Accounting and Sustainable Extrac...mentioning

confidence: 99%

“…The challenge in the calculability of accounting in EIs stems from the high levels of complexity and uncertainty in EIs (Luther, 1996), which contributes to a lack of efficacy in the calculative properties of accounting in the sector and thus increases distrust by stakeholders (Herbohn, 2005). EIs are inherently risky because it is related to future economic benefits and has weak relations to historical cost, which renders accounting numbers on balance sheets uncertain (Cortese et al , 2022). It is thus difficult to fully capture the exact damage that EIs firms inflict on the environment in the sustainability accounting framework.…”

Section: Accounting Infrastructure and Promissory Sustainable Extract...mentioning

confidence: 99%

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Accounting infrastructure and promissory sustainable extractive industries: an actor-network theory analysis

Tran

Nguyen

Lemma

2023

MEDAR

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Purpose This study aims to articulate the conceptual foundations of the role of accounting infrastructure (calculative practice and the communicative dimension of accounting) in extractive industries (EIs) towards a sustainable orientation from an actor-network theory (ANT) perspective. Design/methodology/approach This study is a literature-based analysis of the calculative property and communicative dimension of accounting in EIs, using the concepts of calculability, assemblage and other related concepts from ANT to identify potentialities and limits of the roles of accounting in this sector. Findings While accounting infrastructure can influence social and environmental outcomes, it has not, as yet, led to ecologically and socially sustainable practices in EIs. Calculative properties and the communicative dimension of accounting infrastructure have capabilities to foster the phenomenon of “sustainability” in EIs by valuing, disclosing (reporting) and governing EIs towards a sustainable orientation. Conceptualizing sustainable EIs as a promissory economy, accounting infrastructure serves as a tool not only to represent past performance but also to enact the future: it helps to shape a sustainable future for the industry by informing and triggering behavioural decisions of EIs firms towards sustainable practices. Research limitations/implications This conceptual paper is anticipated to stimulate future sustainability accounting research. The research agenda discussed in this paper can be used to enrich our understanding of the role of accounting in sustainability. Originality/value This paper charts a direction for future research by interpreting the role of sustainability accounting within networks of sociotechnical relations, using ANT concepts which attach importance to the dualism of nature and society. Conceptualizing sustainability accounting and reporting as an infrastructure, which draws more attention to the relationality characteristic of accounting, the study goes beyond the traditional interpretation of accounting as a mediation device and draws on a contemporary view of accounting by invoking the dynamic relation between accounting and society, in the context of EIs.

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Section: Communicative Dimension Of Accounting and Sustainable Extrac...mentioning

confidence: 99%

Section: Accounting Infrastructure and Promissory Sustainable Extract...mentioning

confidence: 99%

Accounting infrastructure and promissory sustainable extractive industries: an actor-network theory analysis

Tran

Nguyen

Lemma

2023

MEDAR

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“…Historically, EI has used methods of accounting that differ principally from one another on how pre-development activities (i.e. acquisition, exploration and evaluation activities) are accounted for (Coutts, 1963;Smith and Brock, 1959), thus producing radically divergent reported results (Russell and Tarbert, 2006;Cortese et al, 2022). On each end of the spectrum are the full cost (FC) and successful efforts (SE) methods (Pacter, 2001), with others being reserve recognition accounting (RRA), the area of interest (AOI), the expense all (EA) (costs written off) method and the appropriation method (Micallef, 2001;Alfredson et al, 2009) [1].…”

Section: Accounting For Extractive Industries 21 Investment Phases An...mentioning

confidence: 99%

“…The third and final wave started post-2000 and paid particular attention to the efforts of the IASB to standardize accounting practices by issuing IFRS 6 – Accounting for extractive industries . The focus of the literature during this period was on evaluating and criticising IFRS 6 (Nichols, 2007; Cortese and Irvine, 2010; Noël et al , 2010; Abdo, 2016), developing a comprehensive accounting standard for the EI (Brock, 2001; Nichols, 2007), the efforts of the IASB to engineer a comprehensive accounting standard for the EI based on a discussion paper (DP) that was published in 2010 (for example, Wright et al , 2010; Russell and Jenkins, 2010; Nichols, 2012; dos Santos and dos Santos, 2014), questioning the validity of EI accounting related standards (Cortese et al , 2022; Nobes and Stadler, 2021) and criticising the IASB decision to change status of IFRS 6 from temporary to permanent (Abdo and Owusu, 2023).…”

Section: Findings Of the Comprehensive Reviewmentioning

confidence: 99%

Accounting practices and regulations for extractive industries: a framework for harmonisation

Abdo,

Owusu,

Mangena

2023

JFRA

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Purpose The purpose of this study is to provide a harmonisation framework for the diverse accounting practices by extractive industries. Design/methodology/approach The study takes a three-stage approach. The first involves a comprehensive literature review of the historical evolution of accounting regulations by extractive industries. The second involves constructing an accounting practice index for extractive industries. The third involves constructing a harmonisation framework. Findings The accounting practice index provides empirical evidence of the wide diversity of accounting practices by extractive industries. Analysis of the literature review addresses the several attempts by accounting and regulatory bodies to standardise the diverse practices of accounting by extractive industries and reasons for the lack of successful standardisations. The authors extract lessons from these previous attempts and propose a harmonisation framework. Research limitations/implications The proposed harmonisation framework can be used to align together the diverse accounting practices by extractive industries and enhance comparability and consistency of accounting figures and statements produced by these industries. Harmonising the diverse accounting practices is crucial for investment decision-making. Originality/value The harmonisation framework is the first of its kind that could enhance the comparability of accounts of extractive industries’ firms and be used to harmonise diverse accounting practices by other industries.

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“…A rich and extensive academic literature from a wide range of disciplines surrounds mining, matching the dominant role of the extractive industries in society both internationally and locally. In accounting, this includes the role mining companies play in standard setting (Luther, 1996; Cortese et al , 2007; Cortese et al , 2009; Cortese et al , 2010; Cortese and Irvine, 2010; Power et al , 2017; Nobes and Stadler, 2021; Baudot and Cooper, 2022; Cortese et al , 2022). Other broad themes of research include business ethics (see, for example, Kapelus, 2002; Yakovleva and Vazquez-Brust, 2012); mineral policy (Velásquez, 2012; Gilberthorpe and Banks, 2012); development policy (Hamann, 2003; Hamann and Kapelus, 2004); sustainability reporting practices (Lodhia, 2018); and environmental management (Jenkins, 2004).…”

Section: Introductionmentioning

confidence: 99%

Accounting in and by the extractive industries: development of a conceptual framework and avenues for future research

Samkin,

Mihret,

Lemma

2024

MEDAR

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Purpose We develop a conceptual framework as a basis for thinking about the impact of extractive industries and emancipatory potential of alternative accounts. We then review selected alternative accounts literature on some contemporary issues surrounding the extractive industries and identify opportunities for accounting, auditing, and accountability research. We also provide an overview of the other contributions in this special issue. Design/methodology/approach Drawing on alternative accounts from the popular and social media as well as the alternative accounting literature, this primarily discursive paper provides a contemporary literature review of identified issues within the extractive industries highlighting potential areas for future research. The eight papers that make up the special issue are located within a conceptual framework is employed to illustrate each paper’s contribution to the field. Findings While accounting has a rich literature covering some of the issues detailed in this paper, this has not necessarily translated to the extractive industries. Few studies in accounting have got “down and dirty” so to speak and engaged directly with those impacted by companies operating in the extractive industries. Those that have, have focused on specific areas such as the Niger Delta. Although prior studies in the social governance literature have tended to focus on disclosure issues, it is questionable whether this work, while informative, has resulted in any meaningful environmental, social or governance (ESG) changes on the part of the extractive industries. Research limitations/implications The extensive extractive industries literature both from within and outside the accounting discipline makes a comprehensive review impractical. Drawing on both the accounting literature and other disciplines, this paper identifies areas that warrant further investigation through alternative accounts. Originality/value This paper and other contributions to this special issue provide a basis and an agenda for accounting scholars seeking to undertake interdisciplinary research into the extractive industries.

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Is the extractive industries standard still fit for purpose?

Cited by 6 publications

References 20 publications

Accounting infrastructure and promissory sustainable extractive industries: an actor-network theory analysis

Accounting infrastructure and promissory sustainable extractive industries: an actor-network theory analysis

Accounting practices and regulations for extractive industries: a framework for harmonisation

Accounting in and by the extractive industries: development of a conceptual framework and avenues for future research

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