Meaningful Ways to Measure Organizational Performance

A key principle of financial reporting is that “information should be expressed so that substance, not form, governs” [1]. What this means is that “the financial statements and accompanying disclosures of a business should reflect the underlying realities of business transactions. Conversely, the information appearing in the financial statements should not merely comply with the legal form in which they appear” [2].  Managers, accountants, and auditors, who are supposed to be concerned with the long-term viability (going concern) of an entity have to be especially concerned with this principle. Auditors appear to be greatly influenced by litigation risk, the fear … Read more