In my remarks I would like to focus on the tension between these two fields of expertise. The turmoil on international financial markets over the last years has revealed a number of shortcomings in the area of accounting These shortcomings are to a large extent underpinned by the current accounting paradigm and the dominance of the shareholder value approach.
The shareholder value approach typically adopts a short-term perspective and aims to determine the value of a particular reporting entity as if the owners were to sell the entity today in an arm’s length transaction. The short-term perspective in turn builds upon the illusion of efficient markets, rational investors and complete information.