Towards A Meta Theory Of Accounting For Knowledge Management: Review The Realities To Stage The Critical Thinking Of Knowledge Business Model
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Published
Mar 1, 2017
Abstract
Knowledge management has always seen as an engine to converttacit knowledge into explicit. Knowledge assets are facilitators to makesuch conversion. Knowledge management paradigm is a turning point in themanagement theories of business. When such paradigm has business dominance,it is time to question how to account for it ? Accounting for “how” and “why”has been largely neglected by the professional bodies and scholars of accounting.Accounting for knowledge management paradigm can be very critical in termsof questioning some of the fundamental assumptions of financial statements.The focus has been very narrow and anachronistic. Accounting for knowledgemanagement is a problematic issue warrant further investigations. Its involvesfar more than the need to address the paradoxes and lacks of accounting modeland practices. The extension of institutional accounting theories highlights howaccounting against knowledge management is totally different from accountingfor operations? Yet, the failure is shaped by the areas of asset recognition andthe appropriateness of the going concern assumption. The virtue of conflict isgrounded in nature of key assets, materiality, agility, visibility, periodicity,creativity, connectivity, interactivity, continuity, and survival. This paper arguesthat accounting for knowledge management must be based on understanding thedynamic nature of knowledge management. This paper contributes to accountingliterature by being the first to identify how knowledge management reality hasshaken the theoretical logic of accounting.
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Keywords
Accountingknowledge managementintangiblesintellectualknowledge assetsvalue paradox
References
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• Anton, H.R. (1966), “The effect of computers on the reliability of accounting measurement”, in R.K. Jaedicke et al., op. cit., pp: 127–128.
• Atkeson, A., and Kehoe, P. (2005), “Modeling and Measuring Organization Capital,” Journal of Political Economy, 113(5), pp: 1026-1053.
• Austin, L. (2007), “Accounting for intangible assets”, The University of Auckland Business Review, Vol 9. No.1, pp: 1-11.
• Barnes, S. and Hunt, B. (2000), “E–Commerce and V-Business”, Butterworth Heinemann, Oxford, UK, pp:25-73.
• Blaug, R. and Lekhi, R. (2009), “Accounting for Intangibles: Financial Reporting and Value Creation in the Knowledge Economy”, Research Report for The Work Foundation’s Knowledge Economy Program, The Work Foundation, London: U.K., pp: 11-42.
• Boisot, M. (1998), “Knowledge assets”, Oxford University Press, pp: 1-16.
• Boulton, R.E.S., Libert, B.D. and Andersen, S. (2000), “Cracking the Value Code: How Successful Business are Creating Wealth in the New Economy”, Harper Business, New York, U.S.A., pp: 23-65.
• Brennan, N. (2001), “Reporting intellectual capital in annual reports: evidence from Ireland”, Accounting, Auditing and Accountability Journal; Vol. 14, No. 4, 2001, pp: 423-436.
• Bukh, P.N. (2003), “The relevance of intellectual capital disclosure: a paradox?”, Accounting, Auditing, and Accountability Journal, Vol. 16, No. 1, pp:49-56.
• Canibano, L. M. Garcia-Ayuso, and M. P. Sanchez, (2000, “Accounting for Intangibles: A Literature Review”, Journal of Accounting Literature, Vol. 19, pp: 102-130.
• Carlucci, D and Schiuma, G (2006), “Knowledge Value Spiral: Linking Knowledge Assets to Company Performance”, Knowledge and Process Management, Vol. 13, No 1, pp: 35-46.
• Cohan, S.P. (2000), “E-Profit: High Payoff Strategies for Capturing the E-Commerce Edge”, American Management Association (AMACOM), New York, USA, pp: 63-187.
• Colquitt, J. A. and Zapata-Phelan, C. P. (2007), “Trends in Theory building and Theory Testing: A Five-Decade Study of The Academy of Management Journal”, Academy of Management Journal, Vol.50, No.6, pp: 1281-1303.
• Corrado, C., Hulten, C. and Sichel, D. (2006), “Intangible Capital and Economic Growth”, NBER Working Paper, No.11948, pp:1-51.
• Curtiss, O. (1999), “Accounting for a New Economy”, Outlook, Vol. 67, No.1, pp: 28-32.
• Davenport, T. H. and Prusak, L. (1998), “ Working Knowledge: How Organizations Manage what they Know”, Boston, Harvard Business School Press, pp:1-57.
• Despres, C. and Chauvel, D. (2000), “Knowledge Horizons”, Butterworth and Heinemann, UK., pp: 131-147.
• Edvinsson, L. and Malone, M.S. (1997), “Intellectual Capital: Realizing Your Company’s True Value by Finding its Hidden Brainpower”, Harper Collins Publishers, New York, pp: 75-101.
• Edwards, J. S., Collier, P. M., and Shaw, D. (2005), “Knowledge Management and Its Impact on the Management Accountant Research Report”, The Chartered Institute of Management Accountants, London: Great Britain, pp: 1-36.
• Firmin, P.A. and Linn, J.J. (1968), “Information Systems and Managerial Accounting”, Accounting Review, Vol. 43, No. 1, January, pp:75-82.
• Gherai, D.S. and Balaciu, D.E. (2011), “From Creative Accounting Practices and Enron Phenomenon to the Current Financial Crisis”, Annales Universitatis Apulensis Series, Oeconomica, Vol. 13, No. 1, pp: 34-41.
• Goldfinger, C. (1997) “Understanding and Measuring the Intangible Economy: Current Status and Future Research”, CIRET seminar, Helsinki, pp:6-27.
• Hakansson, H., Kraus, K. and Lind, J. (2010) Accounting in Network, Routledge, New York, USA, pp: 3-59.
• Hall B. H., and Mairesse, J. (2006), “Empirical Studies of Innovation in the Knowledge Driven Economy”, National Bureau OF Economic Research., Vol. 15, No. 4/5, June/July, pp: 289-299.
• Haanes, K. and Lowendhal, B. (1997), “The Unit of Activity: Towards an Alternative to the Theories of the Firm” Strategy, culture and style, John Wiley and Sons, London, pp:47-93.
• Haskel, J. (2007) “Measuring Innovation and Productivity in a Knowledge-Based Service Economy”, Economic and Labour Market Review, Vol. 1, No. 7, pp: 27-31.
• Holsapple, C.W. (Ed.) (2003), Handbook on Knowledge Management, Vol. 1: Knowledge Matters, Springer Verlag, Berlin Heidelberg, pp: 73-87.
• Howell, R.A. (2002), “Fixing Financial Reporting: Financial Statements Overhaul”, Financial Executive, March/April.
• Janszen, F.(2000), “The age of innovation”, Pearson Education Limited, London, GB., pp:3-32.
• Kaplan, R.S. and Norton, D.P. (1996), “Using the Balance Scorecard as a Management Information System”, Harvard Business Review, January–February, Vol. 74, No. 1, pp.75-85.
• Keen, P.G. and Balance, C. (1997), “On-Line Profit”, Harvard Business School, Boston, USA, pp: 3-58.
• Lambe, P. (2002), “Accounting for Knowledge Management”, Green chameleon Blog. Accessed October, 12, pp: 2012.
• Lev, B. and Zarowin, P. (1999), “The Boundaries of Financial Accounting and How to Extend Them”, Journal of Accounting Research, Vol. 37, pp: 353-386.
• Lev, B. (2001), Intangible, Breakings Institution, Washington DC,20036, USA, pp: 21-51.
• Lev, B. and Gu, F. (2016), “The End of Accounting and the Path Forward for Investors and Managers”, John Wiley and Sons. Inc., New York, pp: 81-93.
• Marr, B. and Spender, J.C. (2004), “Measuring Knowledge Assets-Implications of the Knowledge Economy for Performance Measurement”, Measuring Business Excellence, Vol. 8, No. 1, pp:18-27.
• Martin, C. and Leurent, H. (2017), “Technology and Innovation for the Future of Production: Accelerating Value Creation”, World Economic Forum, pp: 1-38.
• Mckeown, I. and Philip, G. (2003), “Business Transformation, Information Technology and Competitive Strategies: Learning to Fly”, International Journal of Information Management, Vol.23 (2003), pp: 3-24.
• MERITUM Project (2002), “Guidelines for Managing and Reporting on Intangibles (Intellectual Capital Report)”, pp.1–31, TSER Programme, European Union, JEL Codes: M12, Fundacion Aitel Movil, Madrid, Spain.
• Mohammad, A.A., Mansour, E. and Missi, F. (2010), “Validity of Accounting Model in the Knowledge Era”, International Journal Value Chain Management, Vol. 4, Nos. 1/2, pp.142– 152.
• Mohammad, A.A. (2013a), “Potholes of Knowledge Accounting Model”, International Journal Learning and Intellectual Capital, Vol. 10, Nos. 3/4, pp: 314–325.
• Mohammad, A.A. (2013b), “Architecting Knowledge Financial Statements’, International Journal Critical Accounting, Vol. 5, No. 6, pp: 609–622.
• Mouritsen, J. (2003), “Intellectual Capital and the Capital Market”, Accounting, Auditing, and Accountability Journal, Vol. 16, No. 1, pp:18-30.
• Nonaka, I (1991), “The Knowledge Creating Company”, Harvard Business Review, Nov/Dec, pp: 96-104.
• OECD (1996) “Knowledge-Based Economy”, General Distribution, OCDE/GD (96) 102, Paris 1996, pp: 1-46.
• OECD (2008), “Intellectual Assets and Value Creation”, Synthesis Report, pp: 1-35.
• Omotayo, F.O. (2015), “Knowledge Management as an Important Tool in Organisational Management: A Review of Literature”, Library Philosophy and Practice (e-journal). 1238, pp: 1-24. http://digitalcommons.unl.edu/libphilprac/1238.
• Rondeau, P., Vonderembse, M., and Ragu-Nathan, T. (2000) “Exploring Work System Practices for Time-Based Manufacturers: Their Impact on Competitive Capabilities”, Journal of Operations Management, Vol. 18, No. 5, pp: 509–529.
• Roos, J., Roos, G., Dragonetti, N.C. and Edvinsson, L. (1997), “Intellectual Capital: Navigating in the New Business Landscape”, Macmillan, London, pp: 28-77.
• Pandian, P.S. (2011), “Intellectual Capital: Today’s Challenge! Tomorrow’s Asset’, International Journal of Learning and Intellectual Capital, Vol. 8, No. 3, pp: 285-289.
• Prism (2003), The PRISM Report, Eustace, C. (Ed.), European Commission, Information Society Technologies Program, Report No.2. pp: 130-145.
• Prusak, L. (1997), “Knowledge in Organizations”, Butterworth-Heinemann, Oxford, UK, pp:1- 37.
• Prusak, L. (2001), “Where did Knowledge Management Come From?”, IBM Systems Journal, Vol. 40, No.4, pp: 1002-1007.
• Smalt, S. W. and McComb, J. M. (2016), “Accounting for Internally Generated Intangible Assets”, International Journal of Accounting and Taxation, Vol.4, No.1, pp: 1-15, June.
• Stewart, T.A. (2007), “The Wealth of Knowledge: Intellectual Capital and the Twenty-First Century Organization”, Crown Business: New York, USA, pp:1-18.
• Stone, D.N. and Warsono, S. (2003), “Does Accounting Account for Knowledge”, Oxford University Press, Oxford, UK, pp: 253-268.
• Sveiby, K.E. (1997), “The intangible Assets Monitor”, Journal of Human Resource, Costing, and Accounting, Vol. 2 No.1, pp:73-97.
• Young, C.S. and Tsai, L.C. (2012), “Information technology, organizational capital and firm performance”, International Journal of Learning and Intellectual Capital, Vol. 9, Nos. 1/2, pp.151–169.
• Wiig, K.M. (1997), “Integrating Intellectual Capital and Knowledge Management”, Long Range planning, pp:399-405, June.
• Amidon, D.M. (2003), “The Innovation Superhighway Harnessing Intellectual Capital for Sustainable Collaborative Advantage”, Butterworth Heinemann, Oxford, UK, 2003.
• Anton, H.R. (1966), “The effect of computers on the reliability of accounting measurement”, in R.K. Jaedicke et al., op. cit., pp: 127–128.
• Atkeson, A., and Kehoe, P. (2005), “Modeling and Measuring Organization Capital,” Journal of Political Economy, 113(5), pp: 1026-1053.
• Austin, L. (2007), “Accounting for intangible assets”, The University of Auckland Business Review, Vol 9. No.1, pp: 1-11.
• Barnes, S. and Hunt, B. (2000), “E–Commerce and V-Business”, Butterworth Heinemann, Oxford, UK, pp:25-73.
• Blaug, R. and Lekhi, R. (2009), “Accounting for Intangibles: Financial Reporting and Value Creation in the Knowledge Economy”, Research Report for The Work Foundation’s Knowledge Economy Program, The Work Foundation, London: U.K., pp: 11-42.
• Boisot, M. (1998), “Knowledge assets”, Oxford University Press, pp: 1-16.
• Boulton, R.E.S., Libert, B.D. and Andersen, S. (2000), “Cracking the Value Code: How Successful Business are Creating Wealth in the New Economy”, Harper Business, New York, U.S.A., pp: 23-65.
• Brennan, N. (2001), “Reporting intellectual capital in annual reports: evidence from Ireland”, Accounting, Auditing and Accountability Journal; Vol. 14, No. 4, 2001, pp: 423-436.
• Bukh, P.N. (2003), “The relevance of intellectual capital disclosure: a paradox?”, Accounting, Auditing, and Accountability Journal, Vol. 16, No. 1, pp:49-56.
• Canibano, L. M. Garcia-Ayuso, and M. P. Sanchez, (2000, “Accounting for Intangibles: A Literature Review”, Journal of Accounting Literature, Vol. 19, pp: 102-130.
• Carlucci, D and Schiuma, G (2006), “Knowledge Value Spiral: Linking Knowledge Assets to Company Performance”, Knowledge and Process Management, Vol. 13, No 1, pp: 35-46.
• Cohan, S.P. (2000), “E-Profit: High Payoff Strategies for Capturing the E-Commerce Edge”, American Management Association (AMACOM), New York, USA, pp: 63-187.
• Colquitt, J. A. and Zapata-Phelan, C. P. (2007), “Trends in Theory building and Theory Testing: A Five-Decade Study of The Academy of Management Journal”, Academy of Management Journal, Vol.50, No.6, pp: 1281-1303.
• Corrado, C., Hulten, C. and Sichel, D. (2006), “Intangible Capital and Economic Growth”, NBER Working Paper, No.11948, pp:1-51.
• Curtiss, O. (1999), “Accounting for a New Economy”, Outlook, Vol. 67, No.1, pp: 28-32.
• Davenport, T. H. and Prusak, L. (1998), “ Working Knowledge: How Organizations Manage what they Know”, Boston, Harvard Business School Press, pp:1-57.
• Despres, C. and Chauvel, D. (2000), “Knowledge Horizons”, Butterworth and Heinemann, UK., pp: 131-147.
• Edvinsson, L. and Malone, M.S. (1997), “Intellectual Capital: Realizing Your Company’s True Value by Finding its Hidden Brainpower”, Harper Collins Publishers, New York, pp: 75-101.
• Edwards, J. S., Collier, P. M., and Shaw, D. (2005), “Knowledge Management and Its Impact on the Management Accountant Research Report”, The Chartered Institute of Management Accountants, London: Great Britain, pp: 1-36.
• Firmin, P.A. and Linn, J.J. (1968), “Information Systems and Managerial Accounting”, Accounting Review, Vol. 43, No. 1, January, pp:75-82.
• Gherai, D.S. and Balaciu, D.E. (2011), “From Creative Accounting Practices and Enron Phenomenon to the Current Financial Crisis”, Annales Universitatis Apulensis Series, Oeconomica, Vol. 13, No. 1, pp: 34-41.
• Goldfinger, C. (1997) “Understanding and Measuring the Intangible Economy: Current Status and Future Research”, CIRET seminar, Helsinki, pp:6-27.
• Hakansson, H., Kraus, K. and Lind, J. (2010) Accounting in Network, Routledge, New York, USA, pp: 3-59.
• Hall B. H., and Mairesse, J. (2006), “Empirical Studies of Innovation in the Knowledge Driven Economy”, National Bureau OF Economic Research., Vol. 15, No. 4/5, June/July, pp: 289-299.
• Haanes, K. and Lowendhal, B. (1997), “The Unit of Activity: Towards an Alternative to the Theories of the Firm” Strategy, culture and style, John Wiley and Sons, London, pp:47-93.
• Haskel, J. (2007) “Measuring Innovation and Productivity in a Knowledge-Based Service Economy”, Economic and Labour Market Review, Vol. 1, No. 7, pp: 27-31.
• Holsapple, C.W. (Ed.) (2003), Handbook on Knowledge Management, Vol. 1: Knowledge Matters, Springer Verlag, Berlin Heidelberg, pp: 73-87.
• Howell, R.A. (2002), “Fixing Financial Reporting: Financial Statements Overhaul”, Financial Executive, March/April.
• Janszen, F.(2000), “The age of innovation”, Pearson Education Limited, London, GB., pp:3-32.
• Kaplan, R.S. and Norton, D.P. (1996), “Using the Balance Scorecard as a Management Information System”, Harvard Business Review, January–February, Vol. 74, No. 1, pp.75-85.
• Keen, P.G. and Balance, C. (1997), “On-Line Profit”, Harvard Business School, Boston, USA, pp: 3-58.
• Lambe, P. (2002), “Accounting for Knowledge Management”, Green chameleon Blog. Accessed October, 12, pp: 2012.
• Lev, B. and Zarowin, P. (1999), “The Boundaries of Financial Accounting and How to Extend Them”, Journal of Accounting Research, Vol. 37, pp: 353-386.
• Lev, B. (2001), Intangible, Breakings Institution, Washington DC,20036, USA, pp: 21-51.
• Lev, B. and Gu, F. (2016), “The End of Accounting and the Path Forward for Investors and Managers”, John Wiley and Sons. Inc., New York, pp: 81-93.
• Marr, B. and Spender, J.C. (2004), “Measuring Knowledge Assets-Implications of the Knowledge Economy for Performance Measurement”, Measuring Business Excellence, Vol. 8, No. 1, pp:18-27.
• Martin, C. and Leurent, H. (2017), “Technology and Innovation for the Future of Production: Accelerating Value Creation”, World Economic Forum, pp: 1-38.
• Mckeown, I. and Philip, G. (2003), “Business Transformation, Information Technology and Competitive Strategies: Learning to Fly”, International Journal of Information Management, Vol.23 (2003), pp: 3-24.
• MERITUM Project (2002), “Guidelines for Managing and Reporting on Intangibles (Intellectual Capital Report)”, pp.1–31, TSER Programme, European Union, JEL Codes: M12, Fundacion Aitel Movil, Madrid, Spain.
• Mohammad, A.A., Mansour, E. and Missi, F. (2010), “Validity of Accounting Model in the Knowledge Era”, International Journal Value Chain Management, Vol. 4, Nos. 1/2, pp.142– 152.
• Mohammad, A.A. (2013a), “Potholes of Knowledge Accounting Model”, International Journal Learning and Intellectual Capital, Vol. 10, Nos. 3/4, pp: 314–325.
• Mohammad, A.A. (2013b), “Architecting Knowledge Financial Statements’, International Journal Critical Accounting, Vol. 5, No. 6, pp: 609–622.
• Mouritsen, J. (2003), “Intellectual Capital and the Capital Market”, Accounting, Auditing, and Accountability Journal, Vol. 16, No. 1, pp:18-30.
• Nonaka, I (1991), “The Knowledge Creating Company”, Harvard Business Review, Nov/Dec, pp: 96-104.
• OECD (1996) “Knowledge-Based Economy”, General Distribution, OCDE/GD (96) 102, Paris 1996, pp: 1-46.
• OECD (2008), “Intellectual Assets and Value Creation”, Synthesis Report, pp: 1-35.
• Omotayo, F.O. (2015), “Knowledge Management as an Important Tool in Organisational Management: A Review of Literature”, Library Philosophy and Practice (e-journal). 1238, pp: 1-24. http://digitalcommons.unl.edu/libphilprac/1238.
• Rondeau, P., Vonderembse, M., and Ragu-Nathan, T. (2000) “Exploring Work System Practices for Time-Based Manufacturers: Their Impact on Competitive Capabilities”, Journal of Operations Management, Vol. 18, No. 5, pp: 509–529.
• Roos, J., Roos, G., Dragonetti, N.C. and Edvinsson, L. (1997), “Intellectual Capital: Navigating in the New Business Landscape”, Macmillan, London, pp: 28-77.
• Pandian, P.S. (2011), “Intellectual Capital: Today’s Challenge! Tomorrow’s Asset’, International Journal of Learning and Intellectual Capital, Vol. 8, No. 3, pp: 285-289.
• Prism (2003), The PRISM Report, Eustace, C. (Ed.), European Commission, Information Society Technologies Program, Report No.2. pp: 130-145.
• Prusak, L. (1997), “Knowledge in Organizations”, Butterworth-Heinemann, Oxford, UK, pp:1- 37.
• Prusak, L. (2001), “Where did Knowledge Management Come From?”, IBM Systems Journal, Vol. 40, No.4, pp: 1002-1007.
• Smalt, S. W. and McComb, J. M. (2016), “Accounting for Internally Generated Intangible Assets”, International Journal of Accounting and Taxation, Vol.4, No.1, pp: 1-15, June.
• Stewart, T.A. (2007), “The Wealth of Knowledge: Intellectual Capital and the Twenty-First Century Organization”, Crown Business: New York, USA, pp:1-18.
• Stone, D.N. and Warsono, S. (2003), “Does Accounting Account for Knowledge”, Oxford University Press, Oxford, UK, pp: 253-268.
• Sveiby, K.E. (1997), “The intangible Assets Monitor”, Journal of Human Resource, Costing, and Accounting, Vol. 2 No.1, pp:73-97.
• Young, C.S. and Tsai, L.C. (2012), “Information technology, organizational capital and firm performance”, International Journal of Learning and Intellectual Capital, Vol. 9, Nos. 1/2, pp.151–169.
• Wiig, K.M. (1997), “Integrating Intellectual Capital and Knowledge Management”, Long Range planning, pp:399-405, June.
How to Cite
Mohammad, Ahmed Ali. 2017. “Towards A Meta Theory Of Accounting For Knowledge Management: Review The Realities To Stage The Critical Thinking Of Knowledge Business Model”. Studies in Business and Economics 20 (1). https://doi.org/10.29117/sbe.2017.0098.
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