The ValueReporting Revolution: Moving Beyond the Earnings Game

by Robert G. Eccles, E. Mary Keegan, Robert H. Herz, et al.

Book Overview

Provides a comprehensive framework for achieving higher levels of corporate information disclosure and transparency In order to decide whether or not a company is a good investment, analysts and... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0471398799
• Release Date: March 2001
• Publisher: Wiley
• Length: 384 Pages
• Weight: 1.60 lbs.
• Dimensions: 9.6" x 1.1" x 6.5"

Customer Reviews

An XML Software Guy Reviews "The Value Reporting Revolution"

This is the most lucid coverage of an accounting topic that I have ever read, and also the clearest in marrying the underlying accounting principles to the related software topics. The first part of the book explains what Value Reporting is (no surprises here) and why it is needed (in theory). The book then gives how-to examples to clarify the concept. The middle of the book distinguishes this book from many other similar texts -- it explores the history of audited financial reporting, examines previous reforms and why they did not succeed more fully, then gives a data-rich analysis of why Value Reporting is REALLY needed. The last third of the book is even better: It discusses problems and opportunities in Value Reporting; it discusses how the underlying software technology -- both XML (extensible markup language -- a specification or a grammar for a class of languages, but not a specific language itself) and XBRL (extensible business reporting language, a specific "dialect" or implementation of the XML grammar) make it possible to implement Value Reporting; finally, the book explores deficiencies in XBRL and how they need to be corrected if they are to support implementation of Value Reporting.The book is a lucid and pleasant read for accounting experts, software experts, and the much larger population of professionals who are potential users and consumers of Value Reporting.The authors are multidimensional professionals -- they are developers and users of modern systems of financial reporting, and they are experts both in developing the theory of Value Reporting and in implementing specific real-life applications. The book explains several unusual technical and managerial principles in clear and everyday terms, without getting sloppy or misleading for expert readers. Perhaps it is because of the authors' technical qualifications and their experience in applying their expertise to everyday managerial and reporting problems, that they are able to clarify without oversimplifying an almost obvious topic based on quite advanced accounting and software techniques.In the interest of full disclosure to readers who should know something about the reviewer, he holds earned doctorates in Information Theory (Yale) and Mathematics (University of Paris). Between two tours of duty in the US Government at the level of assistant secretary, under secretary, and finally chief executive of an independent agency, he was founding chairman of a software company that was, for quite a few years, an acknowledged leader in designing and implementing financial reporting and control systems. He is today chairman of two start-up technology companies, one of which is applying its technology and software to questions of Value Reporting.

Long Live the Revolution!

The Value Reporting Revolution offers a much needed attack on the status quo of financial reporting and, even more importantly, suggests some remedies. Weaving cases and data from original research, academic papers, and the business press, Eccles et al. have written an accessible guide with minimal accounting jargon and even touches of humor.After thorough analysis of the shortcomings of today's "earnings game," the authors map out a comprehensive approach to determining and sharing key financial and nonfinancial data that will help all business stakeholders assess a company's value. By using internal performance measurement tools such as the Balanced Scorecard for external reporting, companies can focus more clearly on creating value rather than face a quarterly scramble to burnish their earnings picture. Nonfinancial disclosure would also improve decision making for investors by providing a more complete picture of company operations and strategy.In addition to promoting a commitment to improved ongoing communications, the authors note that the Internet and recent financial disclosure regulation have enabled new entrants to develop and distribute a range of economic information and services that compete directly with traditional Big-5 and Wall Street firms. This could signify the end of the "double-secret, uber-whisper" the earnings rumors that reach (and reward) only a subset of a subset of people in the know.As an organizational consultant, this book was very helpful in clarifying the network of relationships among companies, analysts, regulators, accountants, and investors - and showing how they misestimate value and often move markets based on limited, asymmetric information. ValueReporting suggests an alternative way for companies to account for themselves that is aligned with sound management and sound investing.

Well written, well timed, thorough, easy-read call-to-action

This is the first book that adresses the critical issue of corporate reporting - which hasn't significantly changed, if not since business entities started to get created in Ancient Mesopotamia, at least since the Great Depression. Yet investing habits have significantly changed. The SEC has brought in much needed changes in the way financial information gets reported, especially the way reports get written, etc. But there has been little movement in the types of information which get reported or new types of analyses that need to get done so shareholders have a better picture of the companies in which they invest.This book takes us long ways in pushing for such changes. Written by a group of people who know a lot about the topic - unlike most business books, which are typically written by those who know very little, because the ones in the know are too busy working - this sounds the first death knell of corporate reporting as we know it. It is a rather courageous set of arguments that the authors make, coming as it does from an institution, PriceWaterhouseCoopers, which, frankly, has plenty of incentives to maintain the status quo.I would highly recommend this book to every manager, investor, and student of business. One of the nice aspects of the book is its international breadth, further reinforcing the argument that in today's global realities, the changes ought to be globally driven and required.The best thing about the book is its rigor. The authors' authority of over their subject matter clearly comes through the book as does their hands-on experience in wrestling with tricky, complex, corporate reporting issues that companies face and shareholders need - issues that under today's requirements are typically not addressed, and therefore, lead to the kinds of deleterious effects that are evident in today's pump-and-dump markets.Finally, in a world of superficial, shoddy, silly, ghost-written tripe that is published under the guise of management thinking, this book stands as a shining, stellar example of what good management writing is all about: rigor, clarity, and the kind of expansive and aspirational thinking that forces people to want to read a book and ask themselves, "where do I begin?" This book is a much needed call to action on probably the most important managerial, corporate, and financial issue.

A Fundamental Book

The words "compelling" and "accounting" are seldom used in tandem, but there is no other way to describe this call to arms written by former Harvard Business School professor and three accountants at PricewaterhouseCoopers. The book, which is framed as a manifesto for change in the world of corporate reporting, is written in un-accountant-like language bordering on the subversive. It's main message: Traditional corporate reporting practices are inadequate and downright dangerous in the New Economy. They are inadequate because they don't capture the non-financial measures and intangible assets that now drive value. They are dangerous because they force investors to rely too heavily on short-term financial results, thereby contributing to unprecedented volatility in global equity markets. The authors' remedy? Disclosure of more and better information. This new model is presented in such detail that executives could use it as a blueprint in building new corporate reporting regimens. But you needn't be a corporate leader to appreciate the far-reaching implications of this book, which we at getAbstract.com recommend to all professionals as a - yes - compelling analysis of the current practice and evolving future of corporate reporting and its standards, pivotal benchmarks in the global economy.

A compelling read

The ValueReporting Revolution is one of the best, if not THE best, financial book that I have read in the last few years. Thought provoking and compelling, this book provides a sharp analysis of how and why current corporate reporting systems need to evolve. A must read for both the investing community, who need to understand a company's true value, and the financial community, who report on and create a company's value.