Value destruction and financial reporting decisions

Journal Article (Journal Article)

The comprehensive survey reported here allowed analysis of how senior U.S. financial executives make decisions related to performance measurement and voluntary disclosure. Chief financial officers were asked what earnings benchmarks they cared about and which factors motivated executives to exercise discretion - even sacrifice economic value - to deliver earnings. These issues are crucially linked to stock market performance. The results show that the destruction of shareholder value through legal means is pervasive, perhaps even a routine way of doing business. Indeed, the amount of value destroyed by companies striving to hit earnings targets exceeds the value lost in recent high-profile fraud cases. © 2006, CFA Institute.

Full Text

Duke Authors

Cited Authors

  • Graham, JR; Harvey, CR; Rajgopal, S

Published Date

  • November 1, 2006

Published In

Volume / Issue

  • 62 / 6

Start / End Page

  • 27 - 39

International Standard Serial Number (ISSN)

  • 0015-198X

Digital Object Identifier (DOI)

  • 10.2469/faj.v62.n6.4351

Citation Source

  • Scopus