IFRS and XBRL: How to improve Business Reporting through Technology and Object Tracking

CHAPTER THREE

Additional issues

IN ADDITION TO THE NEED FOR MORE acceptance and implementation of IFRS and XBRL, there are other issues that affect the future of business reporting, as well as all that flows thereafter. Consider the circular flow diagram in Figure 3.1.

FIGURE 3.1 Circular flow diagram.

In this figure, it is suggested that improved business reporting prompts better decision making. In turn, this facilitates improved efficiencies and, thereafter, increased economic outcomes. All of that will have a positive effect upon human and environmental conditions, very likely to influence further improvement in business reporting, and so on.

With regard to that cyclical representation of business reporting improvements, consider the following observations and issues, which will affect any people who draft, distribute or use business reporting. These same points will have an impact, directly or otherwise, upon executives who lead and manage entities in commerce and industry, as well as the public and not-for-profit sectors.

The end of double entry bookkeeping

A number of factors have changed the face of finance, accounting and business reporting. Primarily, the digital age has computerised accounting processes. Very quickly, these reached the point where, now, there is no need for anyone to know of so-called ‘T accounts' and other such fundamental principles that were the ...