Article at a glance:

Numbers investors can trust

Executives worry too much about accounting strategies that aim to smooth the performance of companies over time and reduce everything to a simple, bottom-line number. To show what goes into it, companies and their investors would be better served by a greater degree of disclosure. This in turn would help rebuild the trust between them.

The take-away

While executives must account for stock options, goodwill, and the stated value of pension reserves, they should also help investors understand the details of their businesses and work to create real value.