TR (Transparent) Accounting
(TR means Transparent)
Objectives of TR Accounting
Changing perspective of the accounting function due to availability and affordability of technology
The classic Consumption of Accounting and Financial data by statutory and management teams is due to change . There is demand for this info by other sections of the society . Right to Info (RTI) is one such time mark in this direction.
The importance of transparency in accounting has been widely recognized today. Lack of it can make the investors lose substantial interest in the entity or company and steer clear . Exposing the micro details of the accounting data and the running process of a company is needed and is the focus area of TR accounting. TR accounting involves a lot more than the basic level accounting that boils down to keeping track of things to make good decisions. It’ll be a high-altitude overview of accounting to crack different levels of transparency issues, thereby increasing trust and confidence to any outside party. The bedrock of TR accounting is to make the different stake holders involved in the process of accounting to interact with one another to shed light on the different facets of the company’s affairs as highlighted by the accounting data.
2 trends are catalysts .
- Scans and images of accounting documents
- Cloud data storage so that data can be accessed for any point
Also Reconciliation by Visual inspection of the scan is extremely important
Register based book keeping like casting posting is being automated and new methods of data capture [bank transactions triggering transactions (trigger transactions)]
The former objective can be achieved by bringing the non-stakeholders into the scene. They can be catalysts to the new form of accounting. The involvement of media would do wonders to the transparency standards of the current accounting process. It would follow a methodical approach which maps that all the documents of the company would have to be scanned and uploaded. The interface wouldn’t just allow the people to view all the transactions of different concerns but also make remarks and express their views regarding the same.
In other words, TR Accounting would turn out to be Facebook for Accounts. (Note: This needs more explanation without using the “facebook” analogy )
Exposure to micro data (transactions) : Human ingenuity , innovation , imagination and creativilty shall always be ahead of the curve and over all odds , when it comes to regulation & compliance . Exposure to accounting microdata evens these odds .
Human Society goes ahead every time an advantage created is finalyy even’ed out or disrupted. A level field after every innovation is a fertile bed for even further innovation .
Disruption :Ir- relevance of older systems being (suddenly becoming obsolete –without any warning is looming on the horizon) –Financial and accounting data resident on the cloud and its consumption by interested parties is the new paradigm .
TR Accounting offers the stake holders as well as non-stakeholders important insights into the reality. It results into an automatic check system for the sneaky and dishonest companies. Earlier, the company’s affairs got buried and could nowhere be found. The only visible part was journal or the financial statements. Differently, TR Accounting insists on operating a transparent business with a power to expose. This would demonstrate respect and benefit for businesses, customers and government alike.
FEAR OF COMPETITION
HAVING ACCESS TO OUR DATA IS THE MAJOR ROAD BLOCK
A compromise has to be reached between all the powerful vested interests for TR Accounting to come into play. There are enormous chances of dissent by the businesses. Gaining the confidence of the accounting system would be an uphill battle.
Public data -> how public is public (limits to being public) is it public only after audit is the new question ?
Any accounting transaction – Can it be made public when and after what event ? in the lifecycle of a accounting transaction .
Ramp-up the acceptance (scaling up)
Acceptance :Swing of interests – technology tipping the scales of balance . When present advantage weighs more than the fear of future .
Cognizant with the challenges behind its acceptance, several corrective measures would have to be taken. Gaining information on the bodies who own it up followed by building apt standards would have to be done. It’ll constitute different levels of accounting re-engineering.
Non accountants view to the accounting world . new simple Interface to accounting data will increase the consumption of the accounting data and make the experience richer .
Simple analogy is that you don’t need to be a civil engineer to cross a bridge . Accountign has to be made that simple .
Data on cloud is the new normal
Creation of new engine on views / interfaces for consumption of accounting data
Accreditation of statutory bodies
We would need to stick to the resolute core ideas of TR accounting while keeping up with the legal accreditation. Input from all the bodies is needed for the system to be most effective and to create a sense of buy-in.
- Share Stock Exchanges
- IAS International accounting standards body .
Severe road blocks
Where transparency comes to an end, auditing function begins. There lies an overlap between transparency and auditing. The audit report gives a concise form of the entire business process, thereby excluding the highly informative minute details. The stakeholders would find it quite gruelling to adapt to sudden exposure of transparency and would certainly refrain from buying the new idea.
Audit certifies that all info below a particular level is reconciled and compliant and to seek any granular information below a particular level is irrelevant and waste of time and effort .
But “God is in the details “
Accounting On Cloud + reconciliation represents is the single version of truth . else every register has its own version of truth . Non register based accounting .
Plan B/ Plan C (backdoor entry)
In case of a total discord, an out-and-out system would have to be designed to safeguard the whole efforts behind the project conforming to the essence of TR Accounting.