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The Governance and disclosure of the Firm as an Enterprise Entity

Author

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  • Yuri Biondi

    (CERAG - Centre d'études et de recherches appliquées à la gestion - UPMF - Université Pierre Mendès France - Grenoble 2 - CNRS - Centre National de la Recherche Scientifique, PREG-CRG - Pole de recherche en économie et gestion - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique)

Abstract

Recent financial crises and scandals have focused attention on the system of governance and disclosure in a way many may never have imagined and few welcomed. Not only do reforms appear to be necessary to protect shareholders as well as other stakeholders, but also to develop a different understanding of the relationship between the financial markets and the business firm. This paper criticises two daydreams concerning the firm - as a 'black-box' or an 'owner-entrepreneur' - and contrasts them to the idea of the firm as an enterprise entity. The latter implies a comprehensive approach that integrates economics, accounting, and law. The firm is then understood as a managed dynamic system, characterized by different structures of production: institutional, organizational or epistemic (related to the place and role of institutions, internal organization, and knowledge within the firm). Accordingly, the accounting system is an integral part of this framework, one that demonstrates the joint implications of economic, accounting, and legal matters within the firm. In a business affair fraught with unfolding changes coupled with asymmetries of resources, access, control and information, the accounting system copes with the economic and monetary processes generated by the whole enterprise, by representing the enterprise capital (assets and liabilities) and income (revenues and costs). In this way, the accounting system allows this special process to exist and function autonomously from (and interactively with) financial holding of shareholders' claims traded on the Share Exchange.

Suggested Citation

  • Yuri Biondi, 2009. "The Governance and disclosure of the Firm as an Enterprise Entity," Post-Print hal-00441527, HAL.
    • Handle: RePEc:hal:journl:hal-00441527
    Note: View the original document on HAL open archive server: https://hal.science/hal-00441527
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    Citations

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    Cited by:

    1. Williams Paul F., 2019. "Really Rethinking Financial Reporting: A Discussion of Rethinking Financial Reporting: Standards, Norms and Institutions by Shyam Sunder," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 9(2), pages 1-8, July.
    2. Biondi Yuri, 2017. "The Firm as an Enterprise Entity and the Tax Avoidance Conundrum: Perspectives from Accounting Theory and Policy," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 7(1), pages 1-9, April.
    3. Brivot Marion, 2011. "Trust in Freedom or in Equality? A Comment on Bernard E. Harcourt's The Illusion of Free Markets," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(2), pages 1-10, November.
    4. Robé Jean-Philippe, 2011. "The Legal Structure of the Firm," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(1), pages 1-88, January.
    5. Braun Eduard, 2019. "The Ecological Rationality of Historical Costs and Conservatism," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 9(1), pages 1-30, March.
    6. Styhre Alexander, 2018. "The Making of the Shareholder Primacy Governance Model: Price Theory, the Law and Economics School, and Corporate Law Retrenchment Advocacy," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 8(3), pages 1-31, December.
    7. Stevelman Faith, 2013. "Myths about Shareholder Value," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 3(1), pages 1-14, January.
    8. Jonnergård Karin & Larsson-Olaison Ulf, 2018. "Doxa of Shareholders and Owners: On the Threshold of Financialization," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 8(3), pages 1-18, December.
    9. Haslam Colin, 2019. "Rethinking Financial Reporting: Reinstating the Social License of Limited Liability," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 9(2), pages 1-3, July.
    10. Clarke Thomas, 2013. "Deconstructing the Mythology of Shareholder Value: A Comment on Lynn Stout’s “The Shareholder Value Myth”," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 3(1), pages 15-42, January.

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