Can accounting ever be sexy? From IFRS 9 to sustainability and the blockchain
Accounting probably would not count among the more glamorous of professions. The reasons for that status and whether it is justified are beyond the scope of this brief commentary.
What is interesting to note, though, is that the relative attractiveness of accounting is arguably improving, driven by a number of systemic societal developments:
- the need for more proactive assessment of the state of the world, eliminating the infamous “rear-view mirror” pathology. A prime example is the introduction of IFRS 9. A key feature of IFRS 9 is that it requires a forward looking view to be embedded in reported accounts. This is a remarkable (and controversial) break with prior principles which generally shun potentially “subjective” elements (but in practice hide them deep inside the meaning of various reported numbers)
- the need for more inclusive assessment of the state of the world, eliminating blind spots and under-reported externalities that have material impact also on the economic state of an entity. A good example is the adoption of Sustainable Finance which necessitates disclosure of sustainability profiles. This too, is a break with historical practices that focused exclusively on economic / monetary figures.
- the need for more democratized assessemnt of the state of the world, removing friction and improving transparency and accountability. This area is not yet fully developed but a number of developments around automated reporting (XBRL) and technologies for decentralized account keeping (aka blockchain) promise to eventually reshape the profile of accounting for good
None of the above is without growth problems. After all the history of accounting itself is a thousands years history or continuously evolving technologies and practices, reflecting the values of the societies of each era.