Linked opacities: how fragmented transparency regimes undermine accountability in the extractive sector

Firms and governments navigate a global economy with diverse networks of suppliers and intricate economic relationships. Yet, transparency standards are designed to record financial events as singular rather than relational. While critical accounting research has pointed out the limitations of transparency, we bring forward an overlooked critique: transparency standards generate siloed data that does not make systemic interdependencies transparent. We suggest that many financial practices are ‘linked opacities’, where the significance of each event is only clear when considered in conjunction with related transactions, figures or counterparties. This implies that transparency improves accountability for these aspects only if reported data is linkable. Such integrated thinking at the system-level of reporting regimes could lead to emergent accountability. We analyse whether existing frameworks can address linked opacities in a critical illustrative case of the extractive industries. We find that the potential for new transparencies into emergent issues such as corporate tax avoidance remains unfulfilled: current reporting regimes provide all the required data points for tax avoidance detection, but only 2% of the data – equivalent to 27 firms – can be linked across datasets.

Journal Article

Critical Perspectives on Accounting