{"title":"Giving sense to and making sense of OCI: When each component makes sense, but the whole does not","authors":"Sylvain Durocher , Claire-France Picard , Léa Dugal","doi":"10.1016/j.cpa.2024.102717","DOIUrl":null,"url":null,"abstract":"<div><p>The increased prevalence of fair value initiated important changes in accounting standards, one of the most contentious being the appearance of other comprehensive income (OCI). Despite the importance of conceptual grounds for the legitimacy of the profession, OCI is not conceptually defined. Our study examines the process by which OCI was integrated into IFRS on an ad hoc basis, without clear conceptual grounds. Through a documentary analysis of 12 OCI-related standard-setting projects, we examine how the IASB gave sense to, and auditors made sense of, OCI, and how these consultation interactions have contributed to the consolidation of an ad hoc approach to OCI. Our study reveals that the construction of meaning of OCI was a restricted process where the IASB only attempted to give limited meaning to the use of specific OCI items while refraining from providing an understanding for its existence conceptually. We show that auditors, generally depicted as influential actors in the development of accounting standards, made limited attempts to make sense of both the existence and use of OCI. Ultimately, OCI-related standard-setting processes led auditors to tolerate the absence of conceptual principles for OCI and accommodate the standard setter’s ad hoc approach. This progressive accommodation is indicative of the power standard setters can exercise over constituencies within consultation processes, resulting in a paradoxical use of the conceptual framework to endorse ad hoc approaches in standard development. In the end, what our study makes evident regarding OCI is that, if each component makes sense, the whole does not.</p></div>","PeriodicalId":48078,"journal":{"name":"Critical Perspectives on Accounting","volume":"99 ","pages":"Article 102717"},"PeriodicalIF":8.3000,"publicationDate":"2024-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Critical Perspectives on Accounting","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1045235424000169","RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
The increased prevalence of fair value initiated important changes in accounting standards, one of the most contentious being the appearance of other comprehensive income (OCI). Despite the importance of conceptual grounds for the legitimacy of the profession, OCI is not conceptually defined. Our study examines the process by which OCI was integrated into IFRS on an ad hoc basis, without clear conceptual grounds. Through a documentary analysis of 12 OCI-related standard-setting projects, we examine how the IASB gave sense to, and auditors made sense of, OCI, and how these consultation interactions have contributed to the consolidation of an ad hoc approach to OCI. Our study reveals that the construction of meaning of OCI was a restricted process where the IASB only attempted to give limited meaning to the use of specific OCI items while refraining from providing an understanding for its existence conceptually. We show that auditors, generally depicted as influential actors in the development of accounting standards, made limited attempts to make sense of both the existence and use of OCI. Ultimately, OCI-related standard-setting processes led auditors to tolerate the absence of conceptual principles for OCI and accommodate the standard setter’s ad hoc approach. This progressive accommodation is indicative of the power standard setters can exercise over constituencies within consultation processes, resulting in a paradoxical use of the conceptual framework to endorse ad hoc approaches in standard development. In the end, what our study makes evident regarding OCI is that, if each component makes sense, the whole does not.
期刊介绍：
Critical Perspectives on Accounting aims to provide a forum for the growing number of accounting researchers and practitioners who realize that conventional theory and practice is ill-suited to the challenges of the modern environment, and that accounting practices and corporate behavior are inextricably connected with many allocative, distributive, social, and ecological problems of our era. From such concerns, a new literature is emerging that seeks to reformulate corporate, social, and political activity, and the theoretical and practical means by which we apprehend and affect that activity. Research Areas Include: • Studies involving the political economy of accounting, critical accounting, radical accounting, and accounting''s implication in the exercise of power • Financial accounting''s role in the processes of international capital formation, including its impact on stock market stability and international banking activities • Management accounting''s role in organizing the labor process • The relationship between accounting and the state in various social formations • Studies of accounting''s historical role, as a means of "remembering" the subject''s social and conflictual character • The role of accounting in establishing "real" democracy at work and other domains of life • Accounting''s adjudicative function in international exchanges, such as that of the Third World debt • Antagonisms between the social and private character of accounting, such as conflicts of interest in the audit process • The identification of new constituencies for radical and critical accounting information • Accounting''s involvement in gender and class conflicts in the workplace • The interplay between accounting, social conflict, industrialization, bureaucracy, and technocracy • Reappraisals of the role of accounting as a science and technology • Critical reviews of "useful" scientific knowledge about organizations
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