ISSN 2756-3677
International Journal of Banking and Finance ISSN: 8201-4728, Vol. 6 (2), pp. 001-017, February, 2022. © International Scholars Journals
Review
Cash Wealth Maximization: The Panaacea
Riyadh Al-Abdullah, Bassam M. Abu-Abbas
Department of Accounting, College of Business Administration, University of Bahrain, P.O. B ox: 32038, Kingdom of Bahrain.
Accepted 03 April, 2021
Abstract
The tendency of the most important documents related to the formulation of the o bjectives of financial reporting (statements) issued by the most influential professional accounting bodiees (AICPA, FASB and IASB) in the world reflects a bias towards the provision of accounting information funddamentally relevant to the goal of cash wealth maximizatioon. There are two assumptions; explicit and implicit. The explicit assumption is that the information neeeded to achieve the goals of all interested nonn-owners groups, the goal of management accountability and social goals can simply be satisfied by the same accounting information required for achieving thee goal of cash wealth maximization. The implic it assumption is that achieving the goal of cash wealth ma ximization would automatically lead to the attainnment of other goals. Thus, the goal of cash wealth maximiz ation is assumed to be panacea that solves all problems. This simply means that cash wealth maximizationn is the only prime goal that must be given the most priority when formulating the objectives of financiaal reporting (statements) which would lead to foorce homogeneity on what is fundamentally heterogeneous.
Keywords: Cash wealth maximization, coommon information need, management accountability, panacea, social goals.