Corporate Reporting and the Internet: Vision, Reality, and Intervening Obstacles

Posted: 21 Apr 2000

See all articles by Vernon J. Richardson

Vernon J. Richardson

University of Arkansas at Fayetteville

Susan Scholz

University of Kansas - Accounting and Information Systems Area

Abstract

The rapid evolution of Internet technology has created the ability to disseminate new information nearly instantaneously to a world-wide audience. However, traditional accounting communications are becoming increasingly untimely and irrelevant. Investors can wait for financial statements for as long as 90 days while auditing requirements and reporting processes delay their delivery.

To remain relevant, accounting reports must become more timely. The advent of the Internet, with its immediacy and worldwide reach has inspired calls for real-time on-line reporting that is available to all stakeholders. However, there are significant obstacles to achieving this goal. Technological problems with preparing reliable real-time data are daunting, but can be overcome as out-dated legacy systems are replaced with properly implemented enterprise systems. Likewise, continuous auditing processes that can monitor and enhance the reliability of such systems must be completed, but this is mainly a matter of time and investment.

On the other hand, overcoming inhibitions arising from the potential legal liability associated with disclosing new information will require legislative or regulatory intervention. Policy makers should consider using both the carrot of specific, meaningful safe harbor protections and the stick of mandating progressively more timely information releases.

JEL Classification: M41, M44, M49

Suggested Citation

Richardson, Vernon J. and Scholz, Susan, Corporate Reporting and the Internet: Vision, Reality, and Intervening Obstacles. Pacific Accounting Review Millennium Edition, Vol 11, No 2, December 1999/January 2000. Available at SSRN: https://ssrn.com/abstract=213219

Vernon J. Richardson (Contact Author)

University of Arkansas at Fayetteville ( email )

401 WCOB
Fayetteville, AR 72701
United States

Susan Scholz

University of Kansas - Accounting and Information Systems Area ( email )

1300 Sunnyside Ave
Lawrence, KS 66045
United States
785-864-7554 (Phone)
785-864-5328 (Fax)

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