Value Creating Accounting and Its Bearer

Abstract

Corporate governance reform initiatives in Japan are incorporating wisdom of management control research in recent years. We will examine the role of accounting in creating value(s) by allocating resources within organizations. It is found that the essential function of accounting is ‘deviding’ and ‘connecting.’ Taking value-based management as an example, it is illustrated how ROIC divides and connects corporate value and organizational behavior. We will discuss that value creation accounting is urgently needed to dynamically manage business portfolios, and argue that the CFO plays a central role in this.