Is it time to rethink accounting?

While I doubt a major overhaul is forthcoming, the fact that accounting firms are calling for the changes is telling and a good step.

Institutional Shareholder Services -- Corporate Governance Blog: Accounting Firms Seek Overhaul Submitted by: Tad Kopinski, Staff Writer:

"The six biggest international audit firms have called for a complete overhaul of corporate financial reporting as the U.S. and Europe move toward convergence of international audit standards.

In a Nov. 8 report, the accounting firms propose to replace static quarterly financial statements with real-time, Internet-based reporting that encompasses a wider range of performance measures, including non-financial ones. The report was signed by the chiefs of PricewaterhouseCoopers International, Grant Thornton International, Deloitte, KPMG International, BDO International, and Ernst & Young. The report can be downloaded here.

'We all believe the current model is broken,' Mike D. Rake, KPMG's chairman, told the Financial Times....

Rake noted that quarterly reporting and the short-term focus on companies' ability to meet Wall Street earnings expectations helped foster accounting scandals....The large discrepancy between the 'book' and 'market' values of many listed companies is clear evidence that the conten"