Winning Investors Over

Chapter 7

Life Beyond GAAP

Why Managers Should Disclose More Information Than Legally Required

In This Chapter

• The shrinking relevance of accounting information.
• No news is bad news for investors, companies, and managers.
• Voluntary disclosure must complement deficient GAAP information.
• The contours of value-enhancing and career-preserving information disclosure.

Does the information provided in corporate financial reports fulfill investors’ needs? Is the usefulness of this information increasing or decreasing over time? And should managers augment GAAP disclosures? For answers to these weighty questions, look at figure 7-1, spanning the thirty-two-year period from 1975 through 2006. Obviously, the yearly bars are quickly descending from the ...