The ValueReporting Revolution: Moving Beyond the Earnings Game [Hardcover]

Robert G. Eccles (Author), Robert H. Herz (Author), E. Mary Keegan (Author), David M. H. Phillips (Author)

Book Description

Publication Date: March 15, 2001 | ISBN-10: 0471398799 | ISBN-13: 978-0471398790 | Edition: 1

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 investment professionals need to know as much as possible about the company's tangible and intangible assets, as well as a variety of critical performance measures. Written by an international team of experts, The Value Reporting Revolution clearly explains why corporations must move toward greater transparency and, more importantly, it provides a comprehensive framework for achieving that goal. Among other important lessons, readers learn how to identify the gaps between how corporate managers perceive their disclosure practices versus how the markets see them, as well as how to leverage their organizations' electronic communications technology and tools to ensure easy access to vital information and more meaningful data analysis.
Robert Eccles (Jupiter, FL) is President of Advisory Capital Partners, Inc. Robert H. Herz (New York, NY) is a Partner at PricewaterhouseCoopers, US. David Phillips (London, UK) is a Partner at PricewaterhouseCoopers, UK. Mary M. Keegan (London, UK) is head of Global Corporate Reporting at PricewaterhouseCoopers, UK.

Editorial Reviews

Review

Even with the recent drop-off in stock prices, there's still great variation in how financial markets are valuing companies. To add more predictability to valuations, says this team of authors from PricewaterhouseCoopers, companies should take the initiative and publicize the nonfinancial measures that can drive future success. Otherwise, they say, analysts and individual investors will rely on their own estimates, which inevitably either undervalue a company or set it up for a fall. The main trouble, they find, lies not in disagreements over the key drivers but in executives' age-old reluctance to divulge information. The book covers these important debates, as well as the shifting world of accounting principles and oversight, in a comprehensive fashion and with clear prose. Yet while parts of this lengthy, lopsided book are full of detail, the case studies of companies actually experimenting with new metrics are surprisingly thin.
--The Harvard Business Review

From the Inside Flap

The ValueReportingTM Revolution: Moving Beyond the Earnings Game

The ValueReporting Revolution is a rallying cry for radical improvements in corporate reporting-a call to be heeded not just by executives who report on corporate performance and the investors who listen to what they say but also by governing boards, accounting firms, securities analysts, and regulators worldwide.

This revolution is about information. To make sound, long-term investment decisions, large institutional investors and astute individuals alike want to know more about what companies actually do to create value. They especially need information about market dynamics, corporate strategy, and nonfinancial value drivers that are leading indicators of a company's future financial performance and stock price.

Yet too many companies today find themselves locked in The Earnings Game. It's a never-ending and highly dysfunctional game focused myopically on short-term earnings, which in reality say very little about future stock price performance. The consequences of the game? Excessive stock price volatility, inaccurate valuations, and over-reliance on market gossip.

Nothing short of a ValueReporting Revolution will end this game and rid the markets of the crippling consequences. This book delivers a trenchant and often biting analysis of the severe problems that plague today's capital markets. More important, it articulates an array of practical, though controversial, solutions.

ValueReporting calls on corporate executives to provide more, rather than less, of the kind of information they use to create value. It exhorts investors to demand that companies do this. It urges boards of directors to make sure it gets done. And it puts accounting firms and securities analysts on notice that they must become part of the solution rather than part of the problem.

Often provocative and never hesitant to tell it like it is, The ValueReporting Revolution speaks with authority and clarity. It sounds its compelling call to arms to anyone with an interest in dramatically improving the markets on which so many depend.

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Product Details

• Hardcover: 384 pages
• Publisher: Wiley; 1 edition (March 15, 2001)
• Language: English
• ISBN-10: 0471398799
• ISBN-13: 978-0471398790
• Product Dimensions: 9.6 x 6.4 x 1.2 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 4.8 out of 5 stars  See all reviews (17 customer reviews)
• Amazon Best Sellers Rank: #1,379,769 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

15 of 16 people found the following review helpful:

5.0 out of 5 stars A Fundamental Book, February 15, 2001

By 

Rolf Dobelli "getAbstract" (Switzerland) - See all my reviews
(HALL OF FAME REVIEWER)    (TOP 500 REVIEWER)    (REAL NAME)   

This review is from: The ValueReporting Revolution: Moving Beyond the Earnings Game (Hardcover)

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.

11 of 12 people found the following review helpful:

5.0 out of 5 stars Well written, well timed, thorough, easy-read call-to-action, February 17, 2001

By 

Steven Rose "Steve" (New York, New York) - See all my reviews

This review is from: The ValueReporting Revolution: Moving Beyond the Earnings Game (Hardcover)

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.

9 of 10 people found the following review helpful:

5.0 out of 5 stars An XML Software Guy Reviews "The Value Reporting Revolution", February 24, 2001

By A Customer

This review is from: The ValueReporting Revolution: Moving Beyond the Earnings Game (Hardcover)

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.