Is the use of financial accounting fit for purpose? An exploration of the theoretical foundations, framework and practicalities?

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: The aim of this paper is to explore issues in related to the use of financial accounting and reporting by discussing three interrelated areas: (i) the theoretical foundations;, (ii) the framework and (iii) practicalities. The paper also discusses participatory and pluralistic approaches to accounting and corporate governance as alternatives to address some of these issues.
Design/Methodology/Approach: This paper is narrative research based on deductive thematic analysis of secondary data. This study provides a general overview of the existent existing literature on of the limits of the use of financial accounting and its impact on corporate governance business and society.
Findings: In terms of the theoretical foundations, this paper contrasts financial accounting explained by agency theory as opposed to and a dialogic accounting approach.The findings emphasis of this study emphasize the need to establish an account ccounting framework for the interests of the many (not the few). The paper also explores the boundaries of accounting concepts and concludes that financial reporting provides) in conjunction and simultaneously with a narrow view for decision-making and risk management. participatory and pluralistic approach to corporate governance. Finally, this paper explores accounting for carbon emissions as well as and recent financial accounting scandals to questionanalyse the impact of the inappropriate use of financial accounting and reporting as an appropriated mechanism to control multinational corporations’ operationsin business and society.
Originality: This paper provides an overview onof the limits of the use of financial accounting by exploring its theoretical background, framework and practicalities. The paper also provides a discussion on discusses the need of a for new accounting framework to address and corporate governance failures frameworks that allow for a pluralistic and participatory approach to the decision making of companies.
Original languageEnglish
JournalAccounting Research Journal
DOIs
Publication statusAccepted/In press - 11 Jan 2021

Keywords

  • Financial accounting
  • dialogic accounting
  • engagement
  • corporate governance

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