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Ahmed Ali Mohammad
25
SBE, Vol.20, No.1, 2017
ISSN 1818-1228
©Copyright 2017/College of Business and Economics,
Qatar University
4.3 Re-structuring knowledge financial
statements
In order to present a birds’-eye view of the
problems of accounting against knowledge
management, the reporting formats of the
financial statements shall be considered. The
rigid reporting formats have fueled serious
critics against accounting for knowledge
management. The reporting formula of the
financial statements does not match the basic
assumptions of knowledge management. This
formula was valid under the assumptions of the
industrial management. The reality is that
financial statements don’t explicitly show any
technological content weather in the theoretical
philosophy or conceptual building block. As a
result, the reporting format of financial
statements is a data, backward, historical,
physical, monetary, actual, and operations
oriented. A major critic against accounting in
terms of technology is that the procedural rules
and standards have been theorized in isolation
of the technology. Fundamentally, these
realities reflect a deeper problem in the
theoretical assumptions and reporting structure
of accounting. The critical theorists think that
because of this logical lack, the accounting
model was always static, complex, unrealistic,
inefficient, and full of shortcomings. These
logical weaknesses have generated undesirable
consequences especially that related to
financial statements and the information
produced. In contrary, the emergence of
knowledge business model has dramatically
changed the way of doing business. This is
very reflected in knowledge management as
one of the key driving engines of this model.
Thus, this paradox has emerged from the great
gap in technology setting between accounting
for operations and accounting against
knowledge management. The meta-analysis of
the technological context of accounting has
identified a non-relationship between the
technology and the theoretical philosophy of
accounting (Hakansson
et al
., 2010). At this
point, accounting theory of operations is a
Knowledge
Revenue
Power
Knowledge Creation
Partnerships
Innovation Process
Customer Satisfaction
Updating
Conversion
Integration
Commercialization
Integrated
Extended
Interactivity
Connectivity
Agile
Fluid
Figure-3: Architecture of Knowledge Revenue Power