Accounting and the economic nature of the firm as an entity*

This chapter deals with the accounting system as a ‘‘clue’’ for understanding the

economic nature of the firm as a whole and a dynamic system. The dynamic

entity view supported by accounting has two fundamental implications. First, it

implies increased recognition of the special economic and monetary process

generated by the whole firm that is autonomous from external markets. Second,

it enhances the economic understanding of the separation between ownership,

control and management beyond the irrevocably lost proprietary sovereignty.

This leads to an interdisciplinary approach linking economics, accounting, and

law by the shared, synthetic notion of the firm as an entity.