After reading this chapter, you should be able to answer the following questions:
What is the relationship between capital markets and product markets?
What is value-based management and how does it relate to accounting?
What is economic value added (EVA) and why is it important to management?
What is the relationship between strategy, shareholder value, and accounting?
What is corporate governance and what are the basic principles of corporate governance in Canada?
This chapter develops the theme that was identified in Chapter 1 as being important to business understanding: the separation of ownership from control and its importance for accounting information. This separation of ownership and control led to the emergence of capital markets and value-based management, the subject of this chapter. Several tools for measuring shareholder value are also described. The link between ...