"A sophisticated and compelling argument...I...hope...that all of us will stop and listen to these prophets..." --
John Biggs, President and CEO, TIAA-CREF"Accounting is the language of business. This book is a step toward restoring its usefulness." --
Warren Buffett"I heartily recommend the authors’ strategy of identifying and serving the capital markets’ demand for the truth." --
Arthur Levitt, Former SEC chairman
"Many managers direct their attention to manipulating the reported results instead of managing the real results. We envision Quality Financial Reporting as the revolution that replaces old attitudes toward investors and creditors with new relationships characterized by frequent, open, truthful, and otherwise trustworthy communication.
So, how will this revolution come about? The answer to that question is revealed and developed in the rest of the book..." —From the Prologue
Over the past few decades, managers have devised and implemented systems—examples include HRM, TQM, and JIT—designed to deal openly with workers, customers, and vendors. So why are capital markets participants—the all-important creditors and investors who risk their own capital to drive business growth—still often treated as the enemy, someone to be bullied instead of embraced? How have generally accepted accounting principles (GAAP) encouraged instead of discouraged this attitude?
And most important, what can we do to end this charade and make each investor a trusted and welcome member of the management team?
Quality Financial Reporting outlines a long-overdue system for achieving that goal. It details QFR, a higher standard for creating financial reports that can be read and understood by all end users, increasing investors’ confidence while lowering capital costs. Look to this powerful and unflinching book for:
• An authoritative review of the numerous problems with GAAP as practiced today
• Guidelines to a no-holds-barred self-appraisal of managers’ reporting practices and attitudes
• A new strategy for honestly and productively serving the demands of the capital markets
• Clear explanations of the advantages of QFR over the present authoritative financial reporting system
• Relevant empirical research that supports QFR
• Procedures for convincing management of the benefits of QFR
• Techniques for seamlessly adopting and implementing the QFR standard
The relationship between business managers and investors can best be described as distrustful and dysfunctional. Quality Financial Reporting introduces reporting practices that are as rational as they are revolutionary, and establishes a starting point for the clearer and more honest relationships that will be required if U.S. businesses are to flourish in today’s competitive global marketplace. Both eye-opening and practical, it deserves the attention of managers and accountants as well as the investors they must serve—and is destined to make QFR the new and legitimate accounting initiative that will transform tomorrow’s business and investing world.
