Chapter 6Finally, For the Still Unconvinced
“But Accounting Is Complicated”
A final objection we have heard to the battery of accounting usefulness tests we reported in the preceding chapters may be summed up in three words: Accounting is complex. Portraying the operations and financial condition of today's companies—global, fiercely competitive, fast changing, and innovative—requires a highly sophisticated, nuanced, and complex information system. For most investors and lenders, this information system may indeed be obscure, even confusing, hence the increasing chasm we documented between stock prices and financial information. By necessity of reflecting business complexity, our critics argued, much of the information in financial reports is targeted at experts. Indeed, who besides an expert can fathom the accounting jargon of fair values of assets and liabilities (what's fair about those?), impairment of goodwill value, off-balance-sheet financing, ...
Get The End of Accounting and the Path Forward for Investors and Managers now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.