27 / 75
26
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
©Copyright 2017/College of Business and Economics,
Qatar University
technology isolated discipline. It’s a
transactional engine of highly restricted non-
technology terms, certain standards, and
routine rules. As outlined earlier, knowledge
management is a technology intensive, inter-
organizational, visionary, value added, and
customer-based (Carlucci and Schiuma, 2006).
Value is created by innovative use of technology
and fostered by interconnections. Also,
technology enables value process to be more
fluid, flexible, and global scale. The important
idea is that the intensive use of knowledge
technologies reflects the reality of value
creation since it has replaced the transaction
values by interaction values (Amidon, 2003).
The failure of technology to create value means
it will be cost intensive, useless, and
counterproductive (Omotayo, 2015). The
integrated set of interrelated factors such as
technology, market, and organizational change
has identified much of the controversial issues
in financial statements (Janszen, 2000). This
innovation arena has shifted the rules of the
game. The logical shift draws a roadmap that
goes far beyond operations and investment
activities. In addition, risk and uncertainty are
the core characteristic of knowledge cash, and
without the adequate care, the crises may
happened. These two key characteristics
impede the accounting for knowledge cash.
Similarly, the innovative management of
working capital provides a source of knowledge
cash (Keen and Balance, 1997; Shaw, 2003).
The practices of knowledge approach have
been designed to absorb the advantages of
knowledge technologies to improve items and
contents of financial statements (See Table II).
This approach has been started since the mid of
nineties to overcome lacks and shortcomings
of operational accounting. In the 1995s, the
questions have been voiced to show how the
accountant’s community should steer the
available technologies to re-theorize accounting
theory. The practices of this approach begin to
be matured through re-structuring knowledge
balance sheet in consequence of the above calls
for changes. As a reaction to these practices,
the accounting practitioners, consultants, and
researchers have proposed new models for
measuring and reporting intangibles: The
invisible balance sheet (Sveiby, 1997a),
balanced scorecard (Kaplan and Norton, 1996)
and IC (Stewart, 1997; Edvinsson and Malone,
1997) just to mention a few. Also, there are
other practices have managed in Europe and
U.S.A. to develop models for measuring,
managing and reporting intangibles (see
Johanson
et al
., 2001, Larsen
et al
., 1999). As a
result, assets of knowledge financial statements
have been reduced and less working capital
managed. A new set of knowledge financial
statements is formulated through combination
of knowledge technologies and accounting
theory. The features of this new matrix are
evident in transformation of the traditional
items of these statements. The financial assets
have been shifted to business liability. In
addition, managing zero or even negative
working capital is a new reality of knowledge
accounting (Keen and Balance, 1997). The
development of sales technologies has reduced
accounts receivables through rapid collection
process. The result of such application is a
balance sheet that reflects accounts receivables
with period of many days and accounts payable
with time period of months (Barnes and Hunt
2000). Inflation of current assets directly
indicates that investments in knowledge
technologies is inadequate. These technologies
are the electronic payment, electronic data
interchange, networking, and just in time. For
example, doubling the accounts receivable
indicates the inadequacy of the collection
process because poor use of technology.
However, the very law rate of inventory
disposition is evidence of poor customer-
supplier electronic links, and ignoring tools of
just-in-time production and distribution (Young