The Real Effects of AccountingACCOUNTING IS NO MORE JUST ABOUT BOOKKEEPING OR DOUBLE ENTRY: IT'S ABOUT INFORMATION. REPORTING RULES AFFECT BOTH MANAGERIAL BEHAVIOR AND OUR LIVES, ACCORDING TO ANNALISA PRENCIPE, KPMG CHAIR IN ACCOUNTING
If corporations, as of late, are more respectful of the environment and of their customers - if they are more socially responsible - part of the credit goes to accounting and accountants, explains Professor Annalisa Prencipe, KPMG Chair in Accounting.
“Some believe that accounting mirrors reality, but is unable to affect it,” she says. Truth is that accounting has real effects on company value and on corporate behavior. “Disclosure and reporting rules or policies affect managers' real decisions, such as decisions on investments, allocation of resources, consumption or those related to sustainability,” she continues.
“Accounting has its roots in the 15th century. At the time, it was all about book-keeping and double entry, but it has evolved significantly over the years. Today, accounting's far more than mere bookkeeping. We can affirm that accounting is now primarily about information. “The focus has moved from financial statements to corporate reporting, which includes both financial and non-financial information, such as informational strategy, risks, governance and sustainability.”
The KPMG Chair aims at promoting research in accounting for a better understanding of its role and its relevance for value creation. The main research areas of the KPMG Chair are real effects of accounting information, sustainability reporting and non-financial information, the complex relationship between accounting and corporate governance, how digital innovation is reshaping accounting and, finally, the role of accounting for private companies.”
by Fabio Todesco