Accounting standards for supply chains

Abstract

In this paper principles for accounting in supply chains will be developed. The three principles we introduce are: the reciprocity in information access, asset investment and retrieval, and matching risks and returns. The principles provide guidance in managerial and stakeholder decision making, monitoring and control. The information that management and other stakeholders need is based on these standards. The use of the supply-chain accounting principles increases transparency. Transparency is one of the main elements of what Fowler et al (2004) call ‘virtually embedded ties’. We argue that transparency should replace, or at least supplement, relational trust in supply channels. We argue also that technological innovation, such as electronic chain-wide reporting, is beneficial for transparency, decision making and control in/of supply chains, and will reduce the administrative costs of (supply-chain) accounting system at the same time.