This study explores whether respondent firms to the IASC's extractive industries issues paper possess characteristics likely to induce managerial intent to smooth income and if these possibly influenced the pattern of their responses. Firms, especially those with a debt covenant that preconditions provision of debt finance on the attainment or non-violation of some key financial ratios, would desire reports that reflect favorable terms for debt financing, typifying intent to smooth income. The observed lobbying intensity may therefore be consistent with income-smoothing intent. A holistic approach to the standard setting process by extenuation of the inferences from observed lobbying patterns has proved quite useful in understanding the likely underlying assumptions about firms' income smoothing decisions. The design of this study has involved explicating the relationship between views held about proposals and characteristics of firms holding these views, and questioning whether income-smoothing considerations explain the observed response pattern. The findings should be pertinent as we enter a new phase in a revisit of the extractive industries accounting standard.
AN EMPIRICAL EXAMINATION OF INCOME SMOOTHING INTENTIONS IN EXTRACTIVE INDUS Ayodele Oshokamere As
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