This paper looks at an important area for accountants and, more importantly, users of accounts, namely the accuracy to which numbers in published accounts can be stated. Sound financial reporting is fundamental to sound business and it is no exaggeration to say that economic prosperity requires it. Confidence accounting involves showing the expected range and distribution of likely values for significant balance sheet items.
The confidence accounting approach is an example of how some organisations are beginning to challenge perceived wisdom, and asking questions of established accounting methodologies. ACCA is not endorsing this particular approach, but believes that the concept has sufficient merit to be considered further.
'Confidence accounting: a proposal' was issued jointly by ACCA, CISI, and Long Finance as a discussion paper in 2012.