New Reporting Models for Business - Essay Example

Introduction The Monograph on the new reporting models for business was introduced in order to address the growing concern within business community regarding the inadequacy of the financial reporting standards to address some of the critical and emerging issues faced by the modern businesses. This monograph therefore attempted to address some of the fundamental issues and provided some of the suggestions as to how the current reporting standards can be modified and changed to address the new and more pertaining problems faced by the modern businesses. This monograph also proposed 11 key proposals for new reporting models for businesses including the development and implementation of balanced scorecard and other important strategic alternatives. More recent debates on the changes in the financial reporting standards focus on the need to address the non-financial aspects of the business reporting. (Tayyebi, 2008). Thus this new monograph was also focused on the development of new reporting models for businesses which can address the forward looking information regarding the businesses and their viability. Corporate social responsibility standards as well as the reporting on intangibles were some of the themes which emerged in the new efforts made to revamp the accounting reporting standards. The current economic situation however, has relatively changed the way business is being done in the world. There emerged different themes which need to be addressed and integrated in order to make the monograph more pertinent to the current business environment. This paper will therefore provide follow up on this monograph and discuss as to what could be done about the current issues. New Reporting Models for Business New Reporting Models for Business was an effort to propose an alternative view on the way businesses use to report their overall affairs to the shareholders. The main aim of financial reporting is always to allow the shareholders to make sound judgment based on information provided in the financial statements of the business. What is however, significant to note that after the issuance of this monograph, new developments took place and world economy started to slide into decline. Old models of doing business almost failed to provide the results and as such the emphasis shifted on the need for having better and more comprehensive financial reporting standards which can help the shareholders and regulators to keep a check on the future viability of the businesses. What is critical about this monograph is the fact that it emphasized on the need for adapting the new changes taking place in the market. This means that businesses will have to adapt to the new changes and the financial reporting standards have to reflect these changes. Thus it is critical that this monograph must be reconsidered in a manner which can allow it to better suit the current environment and facilitate the businesses in more appropriate manner.( Illingworth, 2004). One of the most important criticisms of the current monograph is based on the argument that one size cannot fit all. This is because of the fact that monograph suggest a standard set of new reporting models for almost all types of businesses. Customization of reporting standards The monograph specifically seeks the comments and suggestions on some of the specific issues identified in the monograph. Specific focus is on whether the standards address certain specific issues or not and what need to be changed to make these standards more relevant. The new monograph specifically discussed some common issues faced by the firms in current business environment. It discussed some emerging themes however; it failed to take into account some of the critical aspects of reporting. It emphasized on the inclusion of criterion for organizational performance, corporate social responsibility as well as the notion of value. What is however, significant to note that it did not considered as to how these reporting standards will be implemented under different circumstances and under different regulatory environments. The burning issue with these models however, is the difficulty in their normative use and how they will be implemented to measure the organizational performance. It is also argued that the frameworks discussed under this monograph have inherent weaknesses and their implementation may be difficult for the organizations.(Boedker, 2006). Frameworks such as balanced scorecards have their own pros and cons which need to be fully examined before any recommendations for their implementation can be forwarded. This means that it is critical that the monograph must address some of the inherent issues of the models it discussed and prescribe the customization of the reporting standards in such a manner which can ensure the implementation of the standards can suit different organizations working in different industries. Reconciliation between Strategy and Accounting Perspective The new set of recommendations made in the monograph attempted to reconcile the accounting and strategy perspective. This monograph however, fails to provide a clear and concise way out for the reconciliation of how the business reporting as well as the accounting reporting mechanisms will be achieved. It is critical for ICAEW to reconcile these differences because it is sometimes difficult for the businesses to actually express the business reporting segments in money terms thus diluting their actual importance of business and financial reporting standards. Most of criticism in this regard is focused on the fact that ICAEW has given too much importance to the intangibles which according to some is the debate which is even left behind by the academics. This therefore means that the standards are pointing towards something which may not be entirely relevant for today’s business. The changes underlying the business environment of today therefore require that the financial reporting standards must help develop a viable business reporting mechanism which can offer the shareholders and regulators an opportunity to clearly assess the business practices of the organizations. It is critical therefore for ICAEW that it must revised the standards in order to ensure that the conflict between voluntary business reporting as well as accounting reporting is minimized. This means that standards must included a mix of how the business dynamics as well as the accounting reporting mechanism can be reconciled in more effective manner. Recommendations and Conclusion Based on the above discussion, following recommendations can be made: 1. There is a need for achieving the balance between the business as well as the accounting reporting. This means that the monograph must outline as to how the business reporting will be able to serve multiple stakeholders? 2. There is also a growing need to put more emphasis on the fact that business reporting standards can actually meet the decision making requirements of all the stakeholders. This is critical owing to the fact that business reporting lacks the ability to provide comprehensive information to each segment of the stakeholders. 3. There is a growing debate on the lack of the ability of the reforms to clearly outline as to how the current reporting models will actually perform. This lack of providing operational clarity to the model and under what conditions it may fail to provide the results. This may therefore require that the monograph must be amended in order to ensure that it provides operational clarity to all of its recommendations made. 4. There is a greater need to include the clear guidelines on the responsibility of the implementation of the new reporting standards. Lack of fixing the responsibilities and outlining the relevant authorities designated to implement the reporting standards as well as measuring the progress of the implementation. This task can be more critical owing to the fact that organizations are becoming global in nature and reconciliation of various regulatory requirements in each country may be different. References 1. Guthrie, J, Boedker, C (2006). Perspectives on “new” models of business reporting: a reflective note. Accounting, Auditing. 19 (6), pp.785-792 2. Illingworth, D (2004). New reporting models for business: who needs them?. Measuring Business Excellence. 8 (2), pp.4-8. 3. Tayyebi, A (2008). New Reporting Models: Where are they? 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