Have Accounting Reports Become Less Useful for Decision-Making?

Accounting reports have come under increasing criticism for being inadequate in the information age. The proliferation of big data combined with the increasing ability to extract knowledge and to detect patterns from the trillions of bits of information is argued by some to render accounting reports superfluous. Contrariwise, I argue these recent information age abilities can complement the systematic chronicling of the past history of an organization in creating a yet richer platform for making informed decisions. To make this possible, however, a remake of the financial reporting model would be helpful. This essay elaborates on what a better and more comprehensive accounting system would look like. It would combine the reporting of historical events with management forecasts and exit values to facilitate meaningful reporting on economic performance.