Principle of Accounting System Dynamics – Modeling Corporate Financial Statements –

摘要

Understanding financial statements is imperative for better managementof corporations, while system dynamics (SD) offers dynamic modelingand simulation skills for better strategies of management. This papertries to present a consolidated principle of accounting system dynamics onthe basis of simple principles from SD and accounting system. It is, then,specifically applied to model corporate financial statements (income statement,balance sheet and cash flow statement) described in the book [3]. Itis shown that cash flow statement is indispensable for modeling financialstatements. At the same time, a limitation of the current accounting systemas a dynamic guidance for management strategies is pointed out. Thisdemonstrates the importance of SD modeling in the field of accountingsystem.