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Revista Contabilidade & Finanças

Print version ISSN 1519-7077On-line version ISSN 1808-057X


SANTOS, Edilene Santana; CALIXTO, Laura  and  BISPO, Maira Ferreira. Impact of the Brazilian Accounting Pronouncements Committee’s New Guideline (OCPC 07) on the downsizing of companies’ Notes. Rev. contab. finanç. [online]. 2019, vol.30, n.79, pp.58-72. ISSN 1808-057X.

This article aims to assess the impact of the New Guideline of the Brazilian Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis - OCPC 07) on improving formal features (size, readability, and specificity) of Brazilian companies’ Notes. OCPC 07 is one of the world’s first guidelines issued in response to the current demand for the downsizing of companies’ Notes, which according to standard setters and market agents have become too extensive, thus characterizing a disclosure overload. This is a unique study on the subject. The results suggest the effectiveness, although limited, of the new standard in promoting a departure from the habits of secrecy and formalism rooted in centuries of legal-accounting civil law tradition, and indicate that there is still room for complementary improvement initiatives in the form of incentives for firms and increased enforcement. Three complementary methodological approaches are used: (1) an analysis of both the evolution of note size after OCPC 07 and the factors explaining that size and its variation; (2) an examination of indicators of readability, conciseness, and specificity of the note on accounting policies; and (3) a size comparison of the Notes of Brazilian and British companies, a benchmark of the common law tradition. An average reduction of 10% in Note size was found two years after the introduction of Guideline (Orientação) 07 by the (OCPC 07). This downsizing was not generalized, but instead identified only among firms in the Novo Mercado and among those audited by two of the Big Four. Even in firms that reduced their notes by at least 20%, no significant improvements in readability levels could be perceived, nor in habits of copy-pasting the auditors’ templates, which could signal a focus on firms’ real practices in the note on accounting policies. Brazilian Notes remain far from the benchmark and are still 40% longer than British ones, despite an equivalent number of pages being expected.

Keywords : OCPC 07; notes; financial statements; downsizing; readability.

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