Modeling Behavioral Interdependencies for Stewardship Reporting.

Abstract

This article focuses on a framework within which accountants may examine a set of assumptions about human behavior and attitudes concerning organized business activity. The American Accounting Association's Committee on Foundations of Accounting Measurement stresses a need to account "for social and organizational equity." It sees "equity accounting" as focusing on the reconciliation of the equities of various interested parties of the organization rather than on prediction. There is, of course, the predictive aspect relating to the need to prepare for the reconciliation of equities at future points in time. At the moment the accountant is in an unsatisfactory position in that he can do no more than "to accept the results of negotiation or the choice of the dominant party among contending interests." To this end two models are developed in outline. The first is a general interactive model of relationships among the firm's participants from a broad stewardship perspective. The second is an external reporting model which might be used to make the theoretical bias of the general model operational.