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The End of Accounting and the Path Forward for Investors and Managers
Book

The End of Accounting and the Path Forward for Investors and Managers

Baruch Lev and Feng Gu
Wiley, 2016

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Editorial Rating

8

Qualities

  • Controversial
  • Analytical
  • Eye Opening

Recommendation

Many investors believe that public companies’ quarterly statements are something akin to gospel. After all, Wall Street analysts and the business media breathlessly parse every detail of major corporations’ earnings announcements. But professors Baruch Lev and Feng Gu claim that these accounting reports have lost their relevance because although the world is moving fast, corporate financial statements have hardly changed in more than a century. In this thought-provoking book, the authors persuasively argue that savvy investors would be wise to understand the shortcomings of traditional accounting. getAbstract recommends this expert analysis to investors, managers and regulators for its critical look at a crucial financial tool.

Take-Aways

  • Financial accounting statements have changed little in more than a century, despite sweeping changes over that period throughout society and the economy.
  • The consolidated income statements of US Steel from 1902 and from 2012 follow the same basic structure and format. 
  • Reported financial data constitute only half of the information sources investors use.

About the Authors

Baruch Lev is a professor of accounting and finance at New York University’s Stern School of Business. Feng Gu is a professor of accounting and law at the University at Buffalo.

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