Eiko Arata: A Warning Against "Single-Set" Specifications

My field of expertise is financial accounting, which is one of the mechanisms for resolving information asymmetry in securities markets. Accounting is often called the language of business, and at one time, it was celebrated alongside IT and English as one of the "three sacred treasures" of business. Whether or not these are truly "sacred treasures" is another matter, but all three share the commonality of being means of communication that had to be standardized because the exchange of information became internationalized.

In order to communicate information across borders—whether they be countries, companies, or villages—it is necessary to standardize the means of communication. The most obvious example is English as a natural language, which currently functions as the global standard. Regarding IT, to use a familiar example, a document created in Word can be exchanged across borders and opened or manipulated on a local computer.

What about accounting? Accounting information, the language used to convey a company's performance to external stakeholders, is generated by applying a tool called "double-entry bookkeeping" according to rules known as "accounting standards." While the system of double-entry bookkeeping itself has long been a standardized tool worldwide, its operational rules originally developed independently as social norms based on the commercial customs of specific countries and regions. However, with the internationalization of securities markets, the trend over the past 40 years has been that operational rules must be standardized to make accounting information from around the world comparable. To this end, the International Accounting Standards Board (IASB) has been struggling with the goal of establishing a "single set" of accounting standards to be used worldwide, but it is difficult to say that they have been successful.

Imagine if you could only use English to express things. Furthermore, these days, Microsoft Office and LINE are often used as defaults in a way that allows for no alternatives; what would happen if those systems were to collapse for some reason?

By drawing analogies to natural language or IT, we can learn much about the negative effects of using a single-set means of communication. Being aware of the drawbacks of single-set specifications is not limited to accounting; it could also provide clues for solutions to numerous problems in education, management, and other fields, such as entrance examinations and organizational performance evaluations.