Book Review: The Accounting Paradox: How Financial Accounting Is Damaging the World (But Can Help Repair It) by Jeremy Nicholls

Accounting as a Social Institution

Accounting is often seen as a technical profession: a language of numbers, ledgers, standards, audits, and reports. It is the infrastructure of trust for modern capitalism, helping investors allocate capital, managers plan strategy, governments collect taxes, and organizations demonstrate accountability. Yet Jeremy Nicholls’ The Accounting Paradox challenges this seemingly neutral view. The book argues that accounting is not merely a passive reporting system. It actively shapes what society recognizes as valuable, what businesses treat as costs, and what economic systems reward or ignore.

The central paradox is clear: accounting is both part of the problem and part of the solution. Financial accounting has enabled economic growth, capital formation, organizational accountability, and market confidence. At the same time, by excluding many social and environmental consequences from the calculation of profit, it has helped create an economy in which businesses can appear successful even when they impose substantial costs on people, communities, and the planet. Nicholls’ argument is not simply that accounting has failed to measure everything. His deeper claim is that what accounting chooses not to measure becomes invisible in decision-making, and what remains invisible is often neglected, underfunded, or sacrificed.