"The major difference between the debate then and now, with the current near absence of debate, is that accounting standards for publicly listed companies are now established on an international stage", says Niklas Sandell.
He and Jörgen Carlsson explain that the power over accounting has shifted from a Swedish context to a somewhat abstract "international" scene, which has led to discussions and debates becoming less accessible and increasingly taken over by accounting specialists, particularly at the London offices of audit firms. Until the early 2000s, the Swedish Accounting Standards Board was active in the international debate.
"The Council for Sustainability and Financial Reporting and FAR's operational group for accounting have taken over this role, but it now primarily involves submitting comments to international organizations such as the IASB (International Accounting Standards Board), EFRAG (European Financial Reporting Advisory Group), and ISSB (International Sustainability Standards Board). The scope and complexity of much of what is published today as drafts for new standards also make it harder to have a broad national debate", says Niklas Sandell.
How can accounting and the debate around it impact society and business at large?
"Accounting is the language through which we describe companies and other organizations. It is important that this language captures the phenomena we are trying to describe in an understandable way in order to provide accurate descriptions of both companies and the broader economy, thus contributing to efficient resource allocation", says Jörgen Carlsson. He continues by saying that since there is no absolutely "right" way to account for things, it is crucial that different arguments about what constitutes the best accounting practice are allowed to be discussed and debated.
What does the award mean to you, and what are you currently working on in terms of research?
"The most enjoyable part of receiving the CH Witt Memorial Award is that such a distinguished jury appreciated our text. We've also received positive feedback from individuals who were active in the debate in the 1990s. At the moment, we don’t have any ongoing joint research projects. Earlier this year, the fourth edition of our book Group Accounting was published, and looking ahead, there’s a strong likelihood that in the spring we will conduct a study for the Council for Municipal Accounting on how Swedish municipalities structure the management commentary in their annual reports. In connection with this, we will also update the example document on the management commentary that we have written for the Council", Jörgen and Niklas say in conclusion.
The CH Witt Award was established by PwC in memory of CH Witt, one of the founders of Balans. The award is presented in collaboration with FAR and was first awarded in 1981. FAR is a professional organization in accounting, auditing, and advisory services.