Accounting choice

Abstract

Accounting is an information system design problem. An objective in the study of accounting is to understand its nature and its utility for helping organizations manage uncertainty and private information. As one of many information sources, accounting has many peculiar properties: it’s relatively late, it’s relatively coarse, it’s typically aggregated, it selectively recognizes and reports information (or, equivalently, selectively omits information), however accounting is also highly structured and well disciplined against random errors, and frequently audited. Like other information sources accounting competes for resources. The initial features cited above may suggest that accounting is at a competitive disadvantage. However, the latter features (integrity) are often argued to provide accounting its comparative strength and its integrity is reinforced by the initial features (see Demski [1994, 2008] and Christensen and Demski [2003]).