This paper is about the possibilities of opening up online reporting to all users of the world. It has three lines of enquiry. The first line considers online reporting in terms of the ‘digital divide’. The second line of enquiry examines online reporting in the context of the ‘accounting divide’. And the third – the main objective of the paper – looks at the reform of the IASB to reduce both the ‘accounting divide’ and the ‘digital divide’ to improve worldwide ‘online reporting’.

It is a timely study because whilst the ‘accounting divide’ has always been present, the ‘digital divide’ may narrow with improved technology. By narrowing the ‘digital divide’ and widening the membership of the IASB, there may be an opportunity for ‘online reporting’ to reach a wider audience that includes users of both developing and developed countries. Quite what is attainable will remain problematic, given the extant cross- and intra-country cultural and political differences throughout the globe, but by opening up the IASB membership to representatives of both the developed and developing countries, the Board may be in a better position to determine that attainability. This study is important because it adds to the literature that raises concerns about the internationalisation of accounting standards setting by self-appointed western experts and contributes to the accounting literature that seeks greater stakeholder group involvement in accounting projects (Brown, 2006). The findings of the paper are of critical importance to domestic and international accounting standards setters and accounting professionals and academics who wish to improve reporting through technologies in both the developed and developing world, and who have an interest in the international participatory process of accounting.

This research draws upon a critical inquiry design that is driven by an interpretivist theoretical perspective, although subsumed within it are interpretations that calls upon a positivist theoretical perspective that falls naturally within the objectivist epistemology.1 Such a mixed research methodology is not uncommon (Crotty, 1998; Guba & Lincoln, 1994; Perry, Alizadeh, & Riege, 1997). But while the positivist approach seeks to identify, explain and predict universal features of society through allegedly value-free, detached observations, the interpretivist approach tries to discern culturally derived and historically situated interpretations of society (Crotty, 1998). These interpretations strive for an awakening of consciousness or of a transformable perception of reality and, as such, are employed by researchers to challenge conventional social structures and to interrogate commonly held assumptions (Freire, 1972).

However, critical inquiry is sometimes grounded in assumptions or leaps of faith about society (Crotty, 1998). This paper, for example, assumes that the IASB would consider a gentle revolution of human consciousness on a global scale; it assumes, optimistically, that IASB members and funders are open to power sharing; and it assumes that the IASB is open to the idea of providing a service to all people, not just the affluent. Such leaps of faith are not uncommon in a wide-ranging area of inquiry that engages an extensive geographical, cultural, political and academic context. The multilateral organisations of the World Bank, the United Nations, the Organisation for Economic Co-operation and Development and the International Monetary Fund have generated global objectives built upon leaps of faith (Stiglitz, 2002) and, of course, ‘field-specific’ practices (Neu, Gomez, Ponce de Leon, & Zepdea, 2003). The global citizens’ action groups of Indymedia Abazonia, International Simultaneous Policy Organisation, Student World Assembly, Neighbourhood Community Network, World Citizen Foundation, World Democracy Network, World Parliament Experiment, World Social Forum, Public Services International have cast their objectives in assumptions of faith. And even the objectives of the IASB and its output of International Financial Reporting Standards (IFRS) are steeped in what one might loosely call jerks of conviction and rather more of ‘field-specific’ practices (see Section 3).

The remainder of the paper is organised as follows. Section 2 examines the implications of the ‘digital divide’ on online reporting through developed and developing world usage. The discussion reveals the digital infrastructural problems of the developing world which prevents the easy transfer of information technologies and, thus, the easy access to the internet and online reporting by most people in that part of the world. This section also considers the lack of interest shown by the IASB in considering the problems of internet access for potential developing country users of accounting information. Section 3 looks at the implications of the ‘accounting divide’ on online reporting. Here the ‘accounting divide’ is seen through an amalgam of economic, political and social differences at the globalised level. Section 4 suggests ways that the IASB may be expanded to improve ‘online reporting’. The inherent assumptions and limitations of the study are considered in Section 5, and conclusions are drawn in Section 6.

2. Online reporting and the ‘digital divide’

Paper reporting is seen by western accounting standard setters as critical in helping an entity’s stakeholders control, plan and make decisions (AASB, 2004 and IAS Plus, 2005). ‘Online reporting’, which is a product of the development of information technology2 and the internet3 and a technological complement to the paper report in the new ‘information age’, is also seen as fundamental to the development of accounting itself (BRRP, 2002 and IASC, 1999). These perceptions, however, are problematic in the accounting systems of developing countries because many entities may not produce or write a report let alone place one on the world wide web. This is an important point because the expectations the developed countries may have on ‘online reporting’ may not be identical to those of developing countries.4 Nevertheless, as Section 3 reveals, this paper contends that more widely disseminated reports are a good thing and that many developing country interests would be served by global online reporting.

For the purposes of this study ‘online reporting’ means a report imparted by an entity through its web address. The definition is wide and makes no expectations about quality, content, timeliness or accuracy. This may fall short of western expectations but it accommodates, and is sensitive to, the extant paper reporting in non-western parts of the world.

2.1. The digital divide between developing country and developed country users

Visions of a global knowledge-based economy and universal electronic commerce characterised by the ‘death of distance’ must be tempered by the reality that half the world’s population has never made a telephone call, much less accessed the Internet.

The ‘digital divide’ is the divide between information-rich users, who have comparatively good opportunities of gaining access to information technologies and the internet, and information-poor users whose opportunities of access are comparatively low (Keniston, 2004, Swaminathan, 2001 and Warschauer, 2002). Information-rich users generally come from developed countries although a minority may come from cities in developing countries (OECD, 1999). Conversely, information-poor users generally come from developing countries although a minority in the developing world, particularly in the rural areas, do not have access to information computer technology (ICT). In a developed world context, there is a positive relationship between internet access and income (Sadowsky, 2004) but not in the developing world context where internet access and income levels are generally too low and social infrastructure too poor to make comparisons.

There are clearly many opportunities for the qualities of the internet, and thus online reporting, to be used to increase developed country’s citizens’ access to accounting information (Beattie & Pratt, 2003), to broaden their economic, social and political participation in the accounting domain (Unerman & Bennett, 2004) and to increase economic growth (Sadowsky, 2004). The general growth of internet usage in developed countries is captured by Beattie & Pratt (2003) in their study of UK companies:

Sophisticated, user-friendly software agents provide the user with effective decision-support facilities. Information can be made available more quickly, potentially, on a real-time basis. Moreover, the use of the Internet means there is no longer any significant technological or cost constraint on the amounts of information that can be disseminated.

These benefits, of course, are not readily available for the many hundreds of millions of potential users who reside in the developing world. They lack access to the internet, face high costs of internet subscription, confront a paucity of internet service providers and hard-wired direct lines, own little hardware (computers), meet high prices in administration, installation settings, maintenance and peripherals, and do not have electricity to drive any available information technology (Keniston, 2004, Swaminathan, 2001 and Warschauer, 2002 Warschauer, M. (2002). Reconceptualizing the digital divide. First Monday Peer-Reviewed Journal on the Internet, (7:7) www.firstmonday.org/issues/issue7_7/warschauer.Warschauer, 2002).