The accounting choice between successful efforts and full cost methods: evidence from International oil and gas companies in Tanzania.
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Date
2018
Authors
Journal Title
Journal ISSN
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Publisher
University of Dar es Salaam
Abstract
The study aimed at exploring applicable accounting methods used by oil and gas companies operating in Tanzania as well as examining the rationale behind selection such accounting method. The study employed qualitative method and used 25 in depth interviews to collect primary data from accountants, external auditors and regulatory bodies. The interviews were triangulated by the annual reports in which accounting policies of the visited companies were reviewed. Thereafter, data were subjected to narrative analysis. The findings reveal that full cost methods and successful efforts method are both used in Tanzania, however successful efforts method is more prevalent as compared to the full cost method. It was further found that, oil and gas companies in Tanzania derived their accounting methods from parent companies. Other probable rationale of account choice mentioned are; legal and local laws, source of finance and external auditors in relation to size of the company. Moreover, despite of the practical popularity of the two methods, yet are not know to some of practitioners. Probably due to the “silent mode” of the IFRS 6 which does not explicitly mention the two methods or the newness of the hydrocarbon sector. The study recommends more trainings on oil and gas accounting. Hence the regulatory bodies could use this opportunity to update practitioners regarding accounting standards relevant to oil and gas sector. Since the study is about accounting choice, further studies with wider sample covering individuals such as board of directors, managing directors or senior management staffs with mandate of approving accounting policy choice could be more appropriate and provide further insights.
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HF5686.P3T34M63)
Keywords
Gas industry, Oil industry, Accounting, Tanzania
Citation
Ally, M. (2018). The accounting choice between successful efforts and full cost methods: evidence from International oil and gas companies in Tanzania. Master dissertation, University of Dar es Salaam, Dar es Salaam.