Financial statements and the death of Osama January 31, 2013 at 5:06 am
Or, why Baudrillard can teach us more about accounting than Descartes
The Epicurean Dealmaker confuses us thus:
accounting is … an epiphenomenon to the actual day-to-day activities which any business conducts. It is a way to keep track of the financial outcomes of a firm’s true activity, which is conducting business.
Why this isn’t false, per se, it is deeply unhelpful. That is because it suggests that there is somehow an underlying `real’ business which `real’ managers, the kind who wouldn’t know a statement of cash flows if they were threatened by one in Central Park, someone live and breathe.
Things are rather different. First, as Baudrillard taught us, the way to think of meaning is not as imbuing some ineffable connection to the real, but rather as a web of reference. In other words, there’s no real business, there is just a collection of actual and conceivable management reports. Management can’t manage `the real business’ because there is no such thing. They can and do manage (and become seduced by*) signs of business. That’s all.
In this light, the current criticism of bank accounting (see, for instance, Partnoy and Eisinger) can be read as an objection to its relationship to other accounts. DVA in the P/L means that US GAAP is substantially different from management accounting, for instance. What the readers of financial statements want to see is something that is closer to not the truth but rather to the narrative that managers have constructed to give themselves comfort. They want an albeit redacted and dramatised precis of what really happened in the situation room, not Brave Zero Thirty.
*Doesn’t this account of seduction remind you of the games management play?
Baudrillard’s concept of seduction is idiosyncratic and involves games with signs which set up seduction as an aristocratic “order of sign and ritual” in contrast to the bourgeois ideal of production, while advocating artifice, appearance, play, and challenge against the deadly serious labor of production. Baudrillard interprets seduction primarily as a ritual and game with its own rules, charms, snares, and lures.