The Balanced Scorecard Model Accounting Essay



This article explores some of the company's accounting and financial situation to play what role in the company rise of process, thus recognizing the concepts of accountability, representation and control in the accounting and financial practices. First, we introduce the concept of accountability, representation and control, then give some examples about Apple, Facebook and Google these three companies accounting and financial practices. Followed by the actual case of the above three companies to understand and analyze the accountability, representation and control of these three concepts. Finally, analysis of the case of the three companies can more easily understand these three concepts and understand the reasons for the rise of the three companies. The paper concludes that through the concept of accountability, representation and control in the accounting and financial practices, people can better understand the rise of Apple, Google and Facebook.


For a successful company, a comprehensive system of accounting and financial practices is necessary. Accountability, representation and control are very important in accounting system and financial practices. As can be seen from the following several cases which these three concepts with the rise of what contact. Firstly, there are a lot of people discuss and define accountability, for example, "Accountability in its broadest sense simply refers to the giving and demanding of reasons for conduct… and, in this broad sense, accountability can be seen as 'a chronic feature of daily conduct." (Roberts & Scapens,1985) However, how the accountability is reflected in the actual financial activities is a problem. Some companies fail, such as Enron and Lehman Brothers, but some companies are successful, such as Google, Apple and Facebook. Secondly, representation is another important concept, and it has an explanation. Representation gives organisations the ability "to transcend the limited spatio-temporal coordinates of immediate contexts and to act on signs or cues that represent absent states of the world, i.e. states extending beyond the here and now" (Kallinikos, 1995)Thirdly, control is a broad concept and control concept has two interlinked meanings. For one concept, the common business management idea is overseeing and directing action through monitoring and regulation of behaviour and activities. For another, the possession of a position of dominance and super-ordination allows the exercise of power and subordination. Apple, Google and Facebook in control do perfect, only companies with good control can manage the financial and day-to-day business of good company. The following analysing the three concepts in the case of the three companies including Apple, Google and Facebook.


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The positioning of the accountability in the financial system is same as other system. The practice of accounting institutionalizes the notion of accountability; it institutionalizes the rights of some people to hold others to account for their actions. [1] For example, Apple ensures its suppliers comply with the Supplier Code of Conduct through a rigorous program of onsite audits at its suppliers' facilities. An Apple auditor leads every audit, supported by local third-party auditors. Each of these experts is thoroughly trained to use Apple's detailed protocol and to assess requirements specified in our Code. Apple reviews all audit findings with the facility's senior management team. When a financial violation is found, Apple requires the facility to implement a corrective action plan that addresses the specific violation, as well as the underlying management system. Apple drives for the implementation of all corrective and preventive action plans within 90 days after the audit findings. (Apple Supplier

Responsibility 2012 Progress Report) Because the review of financial accountability, Apple can build complete industrial chain and supplier. This shows that financial accountability has played an important role in the rise of Apple.

(Figure 1:

Because financial internal audit is confidential, it only shows information about Management accountability system review results. Financial accountability review results similar to Figure)

In Google, Google has an audit committee to deal specifically with the company's financial accountability issues. The Audit Committee's main responsibility is to oversee Google's financial reporting process (including Google's disclosure controls and procedures and system of internal controls). The Audit Committee believes that Google's policies and procedures should remain flexible in order to best react to changing conditions and circumstances. The following list includes the Audit Committee's main recurring processes in carrying out its responsibilities. This list is intended as a guide, with the understanding that the Audit Committee can supplement it as appropriate, consistent with the requirements of the SEC and the Nasdaq.( Google Audit Committee Charter) It can be seen from Google for the attention of financial accountability, further illustrate the status of the accountability in the company's financial system.

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Facebook is a new company. With the successful IPO, its financial accountability is improving. Facebook do not have complete internal audit system as Apple, meanwhile no Google Audit Committee. However, its financial accountability system has its own characteristics. Facebook income is divided into three parts:1, Display Advertising; 2, income obtained by the user to use the virtual currency Facebook Credits to buy virtual goods in games and applications; 3, Search advertising revenues obtained through the Internet search business. Audit business after Facebook IPO success is increasing, but the volume of business is less than Google and Apple. Nevertheless, Facebook has hired many of the internal audit and outsourcing auditors to find problems of financial accountability. Critical Accounting Policies need to be made after the completion of the audit. Viewed in this way, the practice of accounting can be seen to involve the communication of a set of values, of ideals of expected behavior, of what is approved and disapproved. [2] 


Importance of representative has been described at the beginning of article,

after that there are three aspects of representation including displacement,abbreviation and remote control. Displacement means Bringing remote events near while keeping them at a safe distance. Abbreviation means representational technologies simplify (abbreviate) complex reality, making it manageable. Remote control means Immediacy and organic presence are superseded by distance, coolness, and remoteness. [3] 

From displacement aspects, Facebook is an example. Facebook instead of the original social way and establish a new social platform. Facebook platform profit from advertising, social network advertising forms instead of the original form of advertising. Facebook is a social networking service website and a photo-sharing site, the United States ranked first 8.5 million photos uploaded daily on 2007. Facebook recently launched called "Facebook Live" streaming live channel, the channel will be mainly for Facebook users live celebrity interviews, new product launches and other special events, and to encourage users expand interaction and interview guests. Described above Facebook can share remote events and keep a safe distance events. Facebook's revenue reached $ 3.7 billion in 2011; the average revenue growth rate is 118% in the past two years. Facebook's average operating margin is 49% in the past two years. The above data are from establishing "Facebook live". This shows that the financial representation is important to the rise of company.

From abbreviation aspects, the balanced scorecard is a representation and the most important method in accounting and financial representation. The balanced scorecard at Apple serves primarily as a planning device, instead of as a control device. To put it another way, Apple uses the measures to adjust the "long wave" of corporate performance, not to drive operating changes. [4] 

(Figure 2: The Balanced Scorecard Model

Source:, Balanced Scorecard Institute, USA)

Apple developed a balanced scorecard to focus senior management on a strategy that would expand discussions beyond gross margin, return on equity, and market share. For the financial perspective, Apple emphasized shareholder value; for the customer perspective, market share and customer satisfaction; for the internal process perspective, core competencies; and, finally, for the innovation and improvement perspective, employee attitudes. Focus on market share and shareholder value; it is clear that the balanced scorecard is useful for accounting and financial system. The balanced scorecard, on the other hand, is well suited to the kind of organization many companies are trying to become. The scorecard puts strategy and vision, not control, at the center. It establishes goals but assumes that people will adopt whatever behaviors and take whatever actions are necessary to arrive at those goals. The measures are designed to pull people toward the overall vision. Senior managers may know what the end result should be, but they cannot tell employees exactly how to achieve that result, if only because the conditions in which employees operate are constantly changing. [5] For Apple, the largest market share is very important for managers. This is not only increase revenue, but also attracts software developers. Shareholder value including as a performance indicator, even though this measure is a result-not a driver-of performance. The measure is included to offset the previous emphasis and focused company, Apple has introduced measures that shift the emphasis toward customers on sales growth and gross margin, measures that ignored the investments required today to generate growth for future. In contrast, the shareholder value metric quantifies the impact of proposed investments for business creation and development. [6] The above two indicators is an important benchmark in the financial system. They are not only used to develop a business plan, but also relate to managers' compensation plans. Obviously, the balanced scorecard is very important for the company's operating and financial systems.

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From remote control aspects,