Knowledge Creation: Going Beyond Published Financial Information


Waymond Rodgers
Chair Professor in Accounting, University of Texas, El Paso, TX, USA; Hull University Business School, Hull, UK

Series: Business, Technology and Finance
BISAC: TEC027000

Financial statement analysis involves an understanding of an entity by applying analytical techniques to its accounting numbers. However, financial statement analyses are going through a transformation similar to the manufacturing age changing to information centered orientation. That is, it is no longer sufficient to understand the tools for analyzing financial accounting information. Other types of relevant information that are not directly captured by financial statement information have a profound effect on creditors, investors, reporting bureaus, governmental agencies and regulators.

This text differs from other financial statement textbooks in that it not only takes the traditional analysis of financial information, but also management and economic information that is not directly measurable or easily derived from financial accounting reports. Further, this textbook emphasizes the measurement and valuation of brand, sustainability, ethical systems and trusts systems. Moreover, this text also differs in that it provides a modeling viewpoint of information analysis linked with decision makers’ perception and judgments before arriving at a decision. The modeling perspective enhances financial statement analysis by:

1. Including not only financial information, but also management and economic information
2. Combining the passive tools used in investment and financial analysis (e.g., ratio analysis) with individual’s framing of the problem (perception) and analysis (judgment) before arriving at a decision
3. Viewing information analysis through a camera lens reinforced by a basic two stage modeling approach in order to support decisions regarding a particular course of action to implement.

Further, this text transforms what other financial statement analysis textbooks emphasize as an “input-output and static analysis” approach to a more “dynamic and process” approach. In addition, this textbook divulges from a “financial analysis” viewpoint to a “knowledge creation” perspective. This new “knowledge creation” perspective is intended for upper level undergraduates and graduate students, such as accounting, economic, finance, information systems, marketing, organizational behavior students, and psychology and sociology students. In addition, this book can be beneficial to government, non-profit and business oriented individuals. (Imprint: Nova)

Table of Contents

Table of Contents



Chapter 1. Changing face of Financial Analysis

Chapter 2. Financial Statement Analysis

Chapter 3. Throughput Modeling

Chapter 4. Knowledge-Based Assets Analysis

Chapter 5. Accounting and Non-accounting Information and their Impact on Financial Markets: Towards Social Innovation

Chapter 6. Ethical Modeling and Corporate Governance: Enhancing Financial Analysis

Chapter 7. Financial Statements and Fraud Issues

Chapter 8. Relational Risk: Trust Models impacting on Brand Recognition

Chapter 9. Sustainability Measures improving Corporate Governance

Chapter 10. Conclusion



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Chapter 4 [1] Rodgers, W. “Measurement and Reporting of Knowledge-Based Assets,” Journal of Intellectual Capital, 4 (2003), 181-190. [2] Rodgers, W. “Problems and Resolutions to Future Knowledge-based Assets Reporting,” Journal of Intellectual Capital, 8 (2007), 205-215. [3] Upton, WS. “Business and Financial Reporting: Challenges from the New Economy Financial Accounting Series No. 219-A, Financial Accounting Standards Board (April, 2001).  [4] OECD, Final Report: Measuring and Reporting Intellectual Capital: Experience, Issues, and Prospects (Paris: Organization for Economic Co-operation and Development, 2000). [5] Pentland, BT. “Will Auditors Take Over the World? Program, Technique and the Verification of Everything,” Accounting, Organizations and Society, 25 (2000), 307-312. 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[20] Kaplan, RS; Norton, DP. “The Balanced Scorecard,”  Harvard Business Review, (September/October 1996), 134-147. [21] Rodgers, W; Gago, S. “Stakeholder Influence on Corporate Strategies Over Time,” Journal of Business Ethics, 52 (2004), 349-363. [22] Breton, JR. “Social Audit,” archived 2001, [23] Rodgers, W. “Three Primary Trust Pathways Underlying Ethical Considerations,”  Journal of Business Ethics, 91 (2010), 83-93. [24] Day, JD; Wendler, JC. “Best Practice and Beyond: Knowledge Strategies,”The McKinsey Quarterly, 1 (1998), 19-25.[25] Leadbeater, C. New Measures for the New Economy. (London: The Institute of Chartered Accountants, 2000). <[26] Edvinnsson, L; Malone, MS. Intellectual Capital: Realising Your Company’sTrue Value by Fining its Hidden Brainpower (London: Harper Business, 1997).Chapter 5[1] Rodgers, W; Choy, H; Guiral, A. “Do Investors Value a Firm’s Commitment to Social Activities?” Journal of Business Ethics, (2013), 114, (4), 607-623.<br>[2] Rodgers, W; Soderbom, A. “Knowledge Creation and Transfer Effects on Decision Making,” in Social Innovation, eds. T. Osburg and R. Schmidpeter (London: Springer Publications, 2013), 57-64.[3] Ibid., 63.Chapter 6[1] Hwang, BH; Kim, S. “It Pays to Have Friends,” Journal of Financial Economics 93 (2009), 138-158.[2] Rodgers, W; Gago, S. “Cultural and Ethical Effects on Managerial Decisions: Examined in a Throughput Model,”  Journal of Business Ethics, 31 (2001), 355-367.[3] Rodgers, W. “How Do Loan Officers Make their Decisions about Credit Risks? 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[19] Rodgers, W; Housel, T. ―The Effects of Information and Cognitive Processes on Decision-making,  Accounting and Business Research 69 (1987), 67-74.  [20] Rodgers, W; Gago,  S. ―Stakeholder Influence on Corporate Strategies Over Time, Journal of Business Ethics 52 (2004), 349-363.  [21] Rodgers, W; Housel, T. ―The Effects of Environmental Risk Information on Auditors’ Decisions about Prospective Financial Statements European Accounting Review 13 (2004), 523-540.  [22] Culbertson, A; Rodgers, W. ―Improving Managerial Effectiveness in the Workplace: The Case of Sexual Harassment of Navy Women,  Journal of Applied Social Psychology 27 (1997), 1953-1971.  [23] Rodgers, W. ―Three Primary Trust Pathways Underlying Ethical Considerations, Journal of Business Ethics 91 (2010), 83-93.  [24] Kant, I. Groundwork for the Metaphysics of Morals, (New York: Harper and Row, 1964). [25] Mao, H; Krishnan, HS. ―The Effects of Prototype and Exemplar Fit on Brand Extension Evaluations: A Two-Process Contingency Model, Journal of Consumer Research 33(2) (2005), 41-49.  [26] Leclerc, F; Hsee, C; Nunes, JC. ―Narrow Focusing: Why the Relative Position of a Good in its Category Matters More than it Should, Marketing Science 24(2) (2005), 194-205. [27] Beauchamp, TL; Bowie, NE. Ethical Theory and Business, (Upper Saddle River, NJ: Prentice Hall, 1997).  [28] Luo, X; Bhattacharya, CB. ―Corporate Social  Responsibility, Customer Satisfaction, and Market Value, Journal of Marketing 70(4) (2006), 1-18. Chapter 9 [1] Rodgers, W. E-commerce and Biometric Issues Addressed in a Throughput Model, (Hauppauge, NY: Nova Publication, 2010).  DiPiazza, SA. & others, ―Global Capital Markets and the Global Economy: A Vision from the CEOs of the International Audit Networks, Available at: (2006) http:/</i></b></u>/www.

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