Chapter 18 Future Reporting

Financial Information Analysis2 Copyright 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 Analysis3 Copyright 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 Analysis4 Copyright 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 Analysis5 Copyright 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 Analysis6 Copyright 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