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Chapter 18. Future Reporting. 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 - PowerPoint PPT Presentation
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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
Financial Information Analysis 3Copyright 2006 John Wiley & Sons Ltd
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?
Financial Information Analysis 4Copyright 2006 John Wiley & Sons Ltd
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
Financial Information Analysis 5Copyright 2006 John Wiley & Sons Ltd
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
Financial Information Analysis 6Copyright 2006 John Wiley & Sons Ltd
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