News Letter

TOWARDS AMETA THEORY OFACCOUNTING FOR KNOWLEDGE MANAGEMENT: REVIEW THE

REALITIES TO STAGE THE CRITICAL THINKING OF KNOWLEDGE BUSINESS MODEL

SBE, Vol.20, No.1, 2017

ISSN 1818-1228

Qatar University

constructing a new accounting theory against

knowledge management. All these processes

are clearly reflected in Figure-2 below. Finally,

structuring a theory for accounting against

knowledge management faces a unique

challenges and critics. The first of all these

challenges and critics, it may go contrary

to the popular beliefs of the accountant’s

community. The second is that construction of

an accounting theory needs more clarification

in view of both GAAP and IFRS. Finally, this

study is small and humble contribution in the

way of constructing a new accounting theory

against knowledge management.

IV. Meta-Theory: Guidelines

for prospective setting

and pragmatic grounding

4.1

Re-inventing rules of accounting

recognition

As mentioned previously, the current paper is

an exploratory research undertaken to explore

the necessities of accounting against knowledge

management. The adopted methodology has

been based on analyzing the structural body of

accounting in very critical way to knowledge

nexuses. Large bodies of literature are surveyed

to exploring lacks and shortcomings of the

accounting model. However, analyzing theses

lacks is urgent and desirable to gauge the extent

of validity. Accounting model has been under

huge critics because of what can be called

“preventing the wheel”. The effective research

clearly shows a perceived technical gap when

investigating

knowledge

management

literature. It is also evident from the literature

that the problem of accounting is neither rules

nor reporting format. Further, the conflict

between accounting and knowledge is

particularly high in recognition of intangible

assets. A review of research into accounting

dilemmas indicates that almost all the previous

researches have focused on problems of

accounting rules that relate to recognition of

knowledge assets. A second preliminary

paradox that must be disposed is the invisibility

of knowledge assets and revenues. Unlike the

industrial, the knowledge business model does

not care about owing assets. It’s promotes the

idea the fewer assets the better and as a

consequence strip off balance sheet of non-

current assets (Holsapple, 2003). A traditional

business model is a collection of hard (or

physical) assets that bought and owned as a

measure of the capital health. Accounting

against operations is pushing to enhance the

size of the balance sheet. In contract, knowledge

management is based on totally different ideas,

mechanism, and does not care about owing

assets. Its strips balance sheet of non-current

assets. This phenomenon has been called the

victories of information over inventory. At

bottom, accounting terms to define and

recognize asset still same as were set up

throughout the industrial era. The accounting

rules of recognition ignore the investment in

discovery and learning as a driver for creating

knowledge assets. This problem in consequence

reduces the reliability of accounting to provide

relevant and timely information about

knowledge initiatives (Haskel, 2007). The

operational

accounting

ignores

the

implementation phase of value chain where

value usually created or destructed (Lindsey,

2001). The successful development for the new

generated ideas is creating considerable value,

but actual transactions may take years to

materialize. As a result, disconnection between

market and book values is happened (Pandian,

2011). The generally recognized problem is

knowledge assets in terms of how to be

recognized,

measured,

reported,

and

interpreted. Unfortunately, only few researches

have addressed the accounting theoretical

settings. The failure of accounting model to

address knowledge management initiatives can