Financial reporting operates in a changing social landscape. One focus of change in the contemporary social landscape is growing recognition of the impact of human activity on the natural environment, a significant part of which derives from economic activity. Evidence exists that financial statement users want environmental accounting information, yet it remains underdeveloped. This underdevelopment becomes notable because it is increasingly clear that long-term economic viability is wholly dependent on ecological sustainability. This study furthers our understanding of financial reporting, accounting standards, and the standard-setting process as institutional practices in the U.S. by exploring whether voices raising these emerging concerns find receptivity in accounting standards setting. Searle's (1995, 1998) work on constructing institutional reality provides the theoretical frame. Results add a layer of empirical analysis to prior accounting research using this frame to critique the openness of discourse in developing financial reporting.

The American Institute of Certified Public Accountants (AICPA) received 77 comment letters in consideration of SOP 96‐1, “Environmental Remediation Liabilities.” These letters are evaluated for rhetorical tone using quantitative content analysis. Sixteen letters take issue with the narrow scope of the proposed treatment of environmental reporting. These 16 are further analyzed using qualitative content analysis. Comparing rhetorical tone and meaning content of the comment letters reveals active discussion of important environmental reporting issues that go beyond the narrow technical standard adopted.

Data Availability: Data used in this study are available by contacting the author.

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