The use of accounting information in the mediation of contractual disputes: Ruppin Oil Corporation vs Bosphorus Petroleum

Abstract

CPC00R1 states that financial information will be relevant if it has the potential to change the decisions being considered by its users. Therefore, the CPC00R1 assumes that the existence and use of accounting systems precede the act of deciding; the functions performed by those systems are independent of the nature of the decisions; and it is up to accounting to enable decisions and not to shape the decision-making process. This paper analyzed the case of the Refinaria Oriental to demonstrate how Bosphorus Petroleum managers used accounting information to challenge the amount of the fixed costs that were charged to this firm; and how the concepts and techniques for the accounting and control of service department costs could be used in assessing the merits of that challenge. It illustrates a situation where the decision precedes the use of accounting, and accounting is used to provide political arguments and shape the decision-making process.

Keywords

• disputas contratuais
• custos dos departamentos de serviços
• alocação de custos