Accounting seems resistant to change.

Author:Lev, Baruch
Position:AUDIT COMMITTEE
 
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Corporate reports today are practically identical to those published a century ago.

There is no shortage of criticism of the accounting model and the financial information derived from it, and a whole host of proposed remedies: disclosure of nonfinancial variables (key performance indicators, or KPIs); reporting on the impact of firms' operations on people and the planet, in addition to profits (the "triple bottom line, or the three Ps"); or reporting on the intellectual capital of companies (intellectual capital reports), to name a few. While gathering a limited following, none of these criticisms and proposals had a noticeable effect on corporate reporting worldwide, and definitely not in the United States. The fact is, corporate reports today are practically identical to those published a century ago, mirroring the 600-year survival of double-entry bookkeeping. Accounting seems resistant to change.

The reason for the limited success of previous reform proposals is not lack of effort (some change proposals are vigorously pushed by worldwide organizations) or the absence of good ideas--there are definitely some useful suggestions in these proposals. It's, we believe, the lack of a compelling case for...

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