The concept of opportunity cost applied to the accounting statement in the public sector

Abstract

This paper aims to simulate an environment of decision-making, focusing on an evaluation of the application of the concept of opportunity cost in the construction of financial statements, specifically of the use of this concept in the Income Statement. The Agency Theory and Behavioral Finance have divergent views about the role of rationality in the process of decision-making, arguing that other aspects join rationality and are equally or more important than the latter to determine choices in the decision-making process. The environment proposed for the assessment of decision-making was created trying to eliminate other relevant variables that might aff ect that process. The construction of the research environment was inspired by the experiments conducted by Ariely in his book “Predictably Irrational”. The respondents of the survey were selected among the students of Federal University of Paraíba’s courses in Accounting, Business Administration and Economics of several semesters, thus avoiding a concentration of respondents who were at the beginning or the end of the course. When analyzing the results of the questionnaires, it becomes clear that the process of decision-making is affected by aspects such as the shape and position in which information is displayed. It is concluded that it is difficult to apply the opportunity cost as the basis for the construction of the Statement of Income, since it is impossible to meet the Brazilian Accounting Standards Applied to the Public Sector and especially NBC T 16.11, which deals with the cost system in the public sector, where it is claimed that the cost information should have comparability as one of its main att ributes.

Keywords: opportunity cost, decision-making, public sector.