Economic process accounting. Full disclosure

Recent economic events may be forcing the current system of public disclosure of financial information to an evolutionary cusp. The current system of disclosure has been developing over the last seven decades. It was born in an effort to introduce governance to markets without interfering with their...

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Bibliographic Details
Published in:Systems research and behavioral science 2004-11, Vol.21 (6), p.663-680
Main Author: Swanson, G. A.
Format: Article
Language:English
Subjects:
Accounting
accounting information systems
Accounting policies
Auditing standards
auditor independence
Audits
Big Five accounting firms
Closely held corporations
Corporations
Decision making
Disclosure
Economic activity
economic processes
Economic theory
exchange-based societal systems
Executives
Financial information
financial information disclosure
Financial statements
full disclosure
GAAP
Governance
Information systems
Laws, regulations and rules
money-information
Regulation
Stock exchanges
Stockholders
Studies
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Summary:Recent economic events may be forcing the current system of public disclosure of financial information to an evolutionary cusp. The current system of disclosure has been developing over the last seven decades. It was born in an effort to introduce governance to markets without interfering with their useful processes. A choice was made against government regulation and for required public disclosure backed by an independent auditor function. The realization of the degree of auditor independence envisioned and needed has been evasive. It now seems necessary to enhance the disclosure aspect of the system to offset the weakness of achievable auditor independence. This article suggests that fairly minor changes in currently used accounting information systems can support public disclosure of the actual measurements taken by accountants on economic processes. These values should be disclosed to support the accountant‐adjusted values, much like a physician's disclosure of medical test results supports his or her diagnosis. Copyright © 2004 John Wiley & Sons, Ltd.
ISSN:1092-7026
1099-1743
DOI:10.1002/sres.554