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Quality Financial Reporting for the Chief Financial Officer

PART TWO IN A SERIES

Last week, we began a series on the new mindset that we call "Quality Financial Reporting."

At the heart of QFR is the axiomatic proof that voluntarily reporting more complete and useful information will reduce uncertainty and risk for financial statement users, and lead to lower capital costs and higher stock prices. (See Part One for details).

It isn't enough to simply comply with GAAP because industry standards are ostensibly political compromises that do nothing more than establish rock-bottom minimum disclosure levels. Of course, managers must comply with GAAP because it is the law of the land. However, there is no economic justification for reporting only the minimum -- the result is greater investor uncertainty and lower security prices.

This insight did not come easily to us, and we don't expect it to come easily to others, especially our CFO colleagues...

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