Alexander David/ Financial Reporting, Riviste /Fascicolo: 4-2012

I have been invited to write 2000 words about the ‘current existing European accounting situation’, under the general heading of ‘expert’s opinion’. I welcome the opportunity, and propose to concentrate on the ‘opinion’ part rather than the ‘expert’ part. A real academic expert exposition of the ideas would include a very long and detailed bibliography, which is not the ethos I follow here. Rather than select on an ad hoc basis, I give no bibliography at all; the web is available. I believe that financial reporting in Europe, which is not at all the same thing as the ‘European financial reporting’ of my title, is in a mess. I shall support this belief below, in a manner which hopefully will both provoke thought and discussion, and will contribute towards readers’ research agendas. But the root cause of the problems is a failure to provide rigorous theoretical and intellectual analysis of the contexts, needs and objectives of financial reporting. This is a failure by the academic community as a whole. Politicians and bureaucrats (and Eurocrats) are making not only the strategic decisions, which is indeed the prerogative of those we elect (which does not include either bureaucrats or Eurocrats), but many tactical and operational decisions as well. Intellectual dishonesty is rampant, and we as academics have an obligation, and we should have the ability, to expose it. We have largely failed in recent years. To avoid suspense, the answer I give to the title question is ‘No’. Neither the problems I shall outline at national/country level, nor the problems at IASB level, will be alleviated until the validity of this answer is recognised. […]