Future of Accounting and Corporate Reporting

Book Abstract

The last decade has seen developments challenging the abilities of managerial account-ing theories in supporting ?rms with environmental conscious decision-making that are grounded in the expanded accountability of ?rms toward nature and society. Critical theorists have argued that the shortcomings of the accounting theories to interpret theimpacts of business activities on nature have its origin in the missing accounting stan-dards, under-de?ned contractual boundaries, and the absence of a valid num?raire (mon-etary equivalency). In this chapter, the author posits that these shortcomings are a legacyof the economic paradigm within which the accounting frameworks operate and wouldremain so, unless a paradigm change evolves to handle environmental-related consider-ations on its own, even if it means rewriting rules to generate accounting interpretationsof business activities. Instead of o?ering a methodological solution, this chapter ideateshow having ?environment? as integral to the accounting paradigm would enable ?rmsin evaluating, accounting, and reporting environmental performance transparently and improve ?ow of information to help management face sustainability-related challengesbe?er.