Financial Reporting and Corporate Accountability

Abstract

Abstract An established and growing academic literature has developed around the view of a company as a nexus of contracts. The various implications of this literature, however, appear not to have seeped into the financial reporting and corporate accountability policy-making or policy-influencing structure in the UK. This paper addresses this tension between the theory and practice of an important aspect of corporate accountability by: (i) making a case for the explicit recognition of contracting as a legitimate role of external financial reporting; and (ii) arguing that without this there may be significant economic consequences to a variety of stakeholders and a failure to debate in terms of political realities.