Bridging the divides of online reporting

Abstract

This paper looks at the possibilities of improving online reporting by closing the ‘digital divide’ through a ‘digitalised revolution’ and by narrowing the ‘accounting divide’ through the sharing of power and the expansion of membership in the International Accounting Standards Board (IASB). Paradoxically, whilst the IASB may have contributed to the ‘accounting divide’ it may very well possess the potential to close it and thus improve online reporting. The potential to bridge the ‘accounting divide’ rests with the greater participation by developing country members to exert influence and ownership of the accounting standards setting process.

Keywords:

• Online reporting
• Participatory voice
• Digital divide
• Accounting divide
• IASB

Acknowledgement

The author is very grateful for the helpful advice given by the Editors of Accounting Forum.

Notes

1 In other words, whilst much research is grounded in an objectivist epistemology that drives the positivist research methodology that is grounded in empirical data, this paper leans upon a more interpretivist approach that draws upon both data and meanings to gather knowledge

2 Information technology is the hardware and software used in computerised information systems.

3 The internet is a global collection of many networks (local and wide area networks) that interconnect with each other.

4 For the purposes of this paper, even though there are variations across developing countries, they are categorised as one (see Section 5).

5 The World Bank (2003) criteria for classifying economies is gross national income (GNI) per capita, referred to in previous World Bank editions as gross national product (GNP). Low-income economies are classified as generating GNI of US$ 735 or less.

6 In determining its scope for the FASB publication Business Reporting Research Project: Electronic Distribution of Business Reporting Information, the FASB limited its study to companies within the United States to “provide the greatest benefits to the readers of this report, who were considered to include those who prepare and package business reporting information” (BRRP, 2002; p. 17).

7 As of September 2004, the online language population breakdown by language was English (35.2%), Chinese (13.7%), Spanish (9.0%), Japanese (8.4%), German (6.9%), French (4.2%), Korean (3.9%), Italian (3.8%), Portugese (3.1%), Malay (1.8%), Dutch (1.7%), Scandinavian total languages (1.6%), Polish (1.2%), Russian (0.8%) (Global Reach, 2004). In other words, 3.52% use English, 35.7% use non-English European languages and 3.23% use Asian languages.

8 See Section 5 for reasons for pooling all developing country accounting systems as one.

9 Further evidence of IASB’s functional leanings is found in the IASC Foundation Constitution which provides that the Trustees shall “select members of the IASB so that it will comprise a group of people representing, within that group, the best available combination of technical skills and background experience of relevant international business and market conditions in order to contribute to the development of high quality, global accounting standards” (IASC, 2005, Paragraph 19).

10 The distribution of the IASB members is heavily tilted towards auditors and preparers; with a very narrowly defined inclusion of users and other members. Conspicuous by their absence are the users of the 64 low-income economies (see Table 1) and 54 lower-middle-income economies (see Appendix A) of the developing world. It appears their needs for ‘transparent and comparable information in general purpose financial statements’ backed up by ‘quality, understandable and enforceable global accounting standards’ are secondary to dominant developed country accounting users.

11 Monbiot (2003), however, believes that the growth of the United Nation’s democracy has been somewhat constrained by the presence of an unelected Security Council.

12 Narrow self-interested motives such as profit maximization and capital accumulation.

13 Lower-middle-income economies generate GNI of between US$ 736 and US$ 2935 (World Bank, 2003).