Accounting standards could, theoretically and technically, be as transparent and open as OSS. As far as the IASB and FASB's manufactured reporting standards to the public go, they might not even need to exist: transparent accounting could really solve most of these issues. Deception can only occur when some aspect of the formula is mired or obscured. I truly think transparency in accounting is going to be the wave of the future.
My Bachelor's is in Accounting, and one of the reasons I chose to not go into financial (or tax) accounting was this very reason: the legalities. It's just too easy to find a loophole and to adjust financial statements to be appealing to whatever audience an accountant wishes, inside stock owners or outside stakeholders. What portrait I am forced to paint is directly correlated to whomever is paying me. Yeah, technically it might be "legal" but it's not always an accurate or truthful portrait of a company's financial position. Ethics are a giant issue in accounting.
There's a reason the big five accounting firms were reduced to the big 4: SOX always gets a bad rap, but its intentions were really decent. It's just that the degree of complexity has risen beyond an efficient means to capture that complexity.
Openness and transparency, then, are actually the best and most efficient ways.
> There's a reason the big five accounting firms were reduced to the big 4:
Judicial error and/or prosecutorial misconduct appears to be the reason. From the Arthur Anderson Wikipedia page. "[In the ruling vacating the conviction] The [Supreme] court found that the instructions were worded in such a way that Andersen could have been convicted without any proof that the firm knew it had broken the law or that there had been a link to any official proceeding that prohibited the destruction of documents."
So many organizations, so many acronyms, so much talk, but nothing is getting done. This:
The results were dramatic. Deutsche Bank shifted $32 billion of troubled assets, turning a $970 million quarterly pretax loss into $120 million profit. And the securities markets were fooled, bidding Deutsche Bank's shares up nearly 19 percent on Oct. 30, the day it made the startling announcement that it had turned an unexpected profit.
is exactly what these organizations were supposed to stop. Instead they _knowingly_ allowed it.
My Bachelor's is in Accounting, and one of the reasons I chose to not go into financial (or tax) accounting was this very reason: the legalities. It's just too easy to find a loophole and to adjust financial statements to be appealing to whatever audience an accountant wishes, inside stock owners or outside stakeholders. What portrait I am forced to paint is directly correlated to whomever is paying me. Yeah, technically it might be "legal" but it's not always an accurate or truthful portrait of a company's financial position. Ethics are a giant issue in accounting.
There's a reason the big five accounting firms were reduced to the big 4: SOX always gets a bad rap, but its intentions were really decent. It's just that the degree of complexity has risen beyond an efficient means to capture that complexity.
Openness and transparency, then, are actually the best and most efficient ways.