Chapter 18

Chapter 18

Future Reporting

Financial Information Analysis 2Copyright 2006 John Wiley & Sons Ltd

Future Reporting

• Accounting is a social science• i.e., it should and can respond to the

needs of society• Advent of new technologies and media

will prompt change and evolution• Offer both challenges and opportunities• In fact, accounting is well-equipped to

respond in proactive manner


Governance of the Firm

• Existing model has shareholder capitalism focus

• Deficiencies in shareholder value paradigm:• Relatively poor performance over recent

years;• Frauds, earnings management;• ‘Financialisation’ of corporate activity;• Economy v. Society

• Ownership rights of Human Capital• Role of accounting/accountants?


New Economy

• Nature of ‘new economy’ suggests changes in dynamics of wealth-creation

• As leading arbiter of wealth measurement, accounting must address this

• Challenges/Opportunities• accounting-specific issues• intellectual capital and intangibles• new forms of delivery• changes in governance models• emphasis on teams, knowledge flows, etc


New forms of delivery

• New technologies and media offer new means of gathering/disseminating info.• e.g., should accounting information be

available real-time on internet to all?• eXtensible Business Reporting Language

• accounting-led solution to information demands

• will democratise information access • Challenge accountants and auditors to:

• rethink nature of roles• explore new possibilities• respect claims of others, e.g. risk managers


Summary

• Accounting facing variety of challenges:• legacy of previous mistakes/difficulties

• globalisation

• new technologies and media

• weak theoretical/conceptual base

• Next decade will test capacity to respond

• History teaches that it will respond well

Chapter 18

Documents

Transcript of Chapter 18