Value destruction and financial reporting decisions

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.