This study examines the accrual management pattern of oil and gas firms over a period of time that includes more than one significant political or environmental event. The authors focus on corporate response (through earnings management behavior) to different types of political or regulatory events of firms that belong to a different industry having unique disclosure practices, primarily those firms operating in the petroleum and natural gas producing industry.

Earnings Management and Politically Sensitive Environments: Another Test of Corporate Response to Political Costs. Mitra, Santanu and Crumbley, D. Larry, Fall/Winter 2003, pp. 1‑24.

During the past sixteen years, the prices of both oil and natural gas and of refined petroleum products have experienced considerable volatility. While predominant market forces affecting demand may be quite similar across today's integrated world market, public policies vary significantly. The purpose of this study is to determine whether differences in U.S. public policy and those in the rest of the world are reflected in the financial structures of oil firms operating within these environments. The research focuses on national differences in capital structure policy, dividend policy, working capital management, and systematic risk.

Differences in Financial Structure: U.S. and Foreign-Owned Oil and Gas Extracting Firms. Boudreaux, Denis O.; Boudreaux, Phillip; Watson, Tom; and Gale, Lewis, Fall/Winter 2003, pp. 25‑33.

This first part of a two-part study of post-production deduction in the determination of royalties concerns the three states that determine these deductions "at the well"—Texas, Louisiana, and Mississippi. Part Two will appear in the Spring 2004 issue of the Petroleum Accounting and Financial Management Journal and will deal with the "marketable product" states of Oklahoma, Arkansas, Colorado, and Wyoming, and the role of the Minerals Management Service in interpreting ambiguity in royalty contracts.

Post-Production Deductions from Royalty, Part One. Poitevent II, Edward B., Fall/Winter 2003, pp. 34‑57.

The Securities and Exchange Commission (SEC) has moved to require that publicly held companies disclose the fees paid to their external auditors for Auditing and other services in their annual proxy statements, including the amount charged by public accounting firms to conduct the required annual audits of energy companies. Although previous studies have examined factors affecting audit fees, inquiry in this area has been hampered by the lack of publicly available information about audit fees for specific companies. However, recent regulatory actions permit examination of this audit issue facing energy concerns.

Further Evidence on the Determinants of Audit Fees of Energy Firms. Wilson, Thomas E., Fall/Winter 2003, pp. 58‑68.

Policy makers have an interest in promoting banking sectors that are both stable and efficient. Stability requires sufficient banking profitability, while economic efficiency requires banking spreads that are not too large. A prerequisite to formulating effective banking polices is to understand the determinants of bank profitability, especially when considering these issues in an economy predominated by petroleum.

The Determinants of Bank Profitability of a Petroleum Economy: The Case of Saudi Arabia. Essayyad, Musa; Ramady, Mohamed; and Al-Hajji, Mohsen, Fall/Winter 2003, pp. 69‑101.

Section 1031of the Internal Revenue Code provides many planning opportunities, particularly with respect to oil and gas and real estate ventures. These opportunities, however, are coupled with varying degrees of complexity, and there are many intricate requirements and traps for the unwary. Nevertheless, practitioners who are well versed in Section 1031 have many tax minimization opportunities to offer their clients.

Issues, Opportunities, and Pitfalls in Like-Kind Exchanges of Oil and Gas Properties. Mccann, Robert; Pulliam, Robert; and Wilson, William H., Fall/Winter 2003, pp. 102‑121.

Colombia and Sno Tomé e Principe stand at opposite ends of the spectrum in the global market for exploration acreage and projects—a theme addressed extensively in this column. One country is a net exporter. The other has no production whatsoever. In both cases, things are about to change.

Current Developments in Production Sharing Contracts and International Petroleum Concerns: From Exodus to Feeding Frenzy—Opposite Ends of the Spectrum. Johnston, Daniel, Fall/Winter 2003, pp. 122‑129.

A growing number of countries have made the decision to convert to IASB standards. By 2005 all publicly traded companies in European Union member countries must adopt accounting standards issued by the International Accounting Standards Board (IASB). Additionally, adoption of IASB standards by 2005 is mandatory in a number of other countries including Australia and Russia. The Securities and Exchange Commission (SEC) has also taken up the issue of globalization and has indicated that it intends to pursue a dual objective of upholding high quality financial reporting domestically, while encouraging convergence towards a high quality global financial reporting framework.

Current Developments in Environmental Issues. Wright, Charlotte, Fall/Winter 2003, pp. 130‑135.

A report on the activities of the Council of Petroleum Accountants Societies from the executive director, Jon Gear.

COPAS: An Update. Gear, Jon, Fall/Winter 2003, pp. 136‑142.