Open-Book Accounting (and Apple…)
I have been ranting and wittering on about open-book accounting for years.
Let me explain again.
Since, today, almost all accounting systems are computerised, and since almost all computers are capable of being connected to the Internet, there is no technical reason why every ledger, every account, even every invoice in every Government department and every public and private company should not be made world-readable. We wouldn’t need to wait for today’s announcement to discover Apple’s extraordinary sales in the last quarter: a BingBot or GoogleBot would have been scouring their books and we’d have known, day by day, hour by hour, minute by minute how well they were doing.
Now I haven’t done the analysis, but I bet there was a noticeable upwards movement in Apple’s share price before the announcement – although, to be fair? to Apple, they do run a pretty tight ship when it comes to keeping information inside. But if they did keep their accounts open, then there wouldn’t be sudden jumps in the share price. There would be no such thing as insider information. Traders and investors would always know, in real time, exactly how well they were doing, and could price accordingly. It would reduce the opportunity for risky but profitable stock-punting: true transparency always increases competition, and competition always decreases profits.
But open-book accounting isn’t just about opening everything up; it turns out it’s rather more complicated.
There are two sides to every transaction. On the one side, a corporation or a state – an entity about which we as shareholders or citizens should HAVE THE RIGHT to know everything; on the other, often – an individual private citizen. And neither we, nor the state, have the right to know anything about what our fellow citizens do with their lives. Our goal (well, my goal as a Transparency Extremist, and it should be yours too) is Public Transparency, Private Privacy.
The paradox of openness: better access control
If open-book accounting is to be adopted, then accounting systems need to implement better access control, in order to keep the private bits private.
For the last few years, in my spare time as an amateur computer programmer, I’ve been developing computer code that will implement the sort of granular access control needed for open-book accounting. I’m now putting it together, first as a book-keeping system for small businesses who need to keep their team – including mentors and investors – informed in real-time.
I’m now at the stage where I need to assemble a team to help me take it further, faster.
You can find out more by looking at this presentation: and by following my tech persona @platosys on Twitter.