A Professor of Accounting at Babcock University, Ishola Akintoye, has said the current financial reporting system is inadequate to address the strategic earning of corporate and individual life.
Akintoye said this is so because sustainability accountability is yet to be incorporated in the current financial reporting.
Akintoye, while delivering the university’s 28th inaugural lecture, said the efficiency of sustainable accounting report will impact greatly on sustainable financial report.
The don said the past conceptual framework for the definition of accounting “cannot be adequate in driving accounting in the contemporary times and in the future. If efforts are not made for an urgent redefinition of accounting, the entire accounting building, which is currently cracking, will sink beyond redemption.”
In his lecture entitled: “Accounting: A mismanaged concept requiring urgent redefinition,” Akintoye said he and a team of accounting experts were developing a new accounting model named, ‘Sustainability Accounting’, which goes beyond the current assumption of stability and growth, to bring in economic, environmental and social factors.
Akintoye said they were leveraging on Global Sustainability Index, which has been developed for countries of the world, to provide direction for government, private sectors and individuals as targets for all activities to be achieved in 2030. According to Akintoye, the sustainable development targets are 17 and they include no poverty, zero hunger, good health and wellbeing, quality education, gender equality, clean water and sanitation, affordable and clean energy, decent work and economic growth, industry, innovation and infrastructure, reduced inequality, sustainable cities and communities.
Others include responsible consumption and production, climate action, life below water, life on land, peace and justice, and strong institutions partnership, all of which are required to achieve this goal.
Akintoye asserted that an efficient sustainable financial report will enhance decision-making of the total stakeholders and guarantee the growing concern of the business as well as the society in general.
The current concept of accounting and financial reporting system is inadequate to address the life of corporate and individual entities.
He recommended that the Federal Ministry of Education and the National Universities Commission should include in the accounting curriculum at every level of education, the subject of strategic accounting and sustainability accounting; that the practice of accounting must demonstrate and emphasise driving the future, rather than short or medium term in the private and public sector of any economy, if long term sustainability will be actualised; the need to include human and environmental assets in the venture capital in business commencement and in evaluation of the strength and weakness of a company; government in all countries should insist, through their local regulatory agencies, that environmental cost and human capital be revealed in the statement of financial position of all corporate entities for public consumption.