Accounting statements are like bikinis: “What they show is interesting, but what they conceal is significant.” According to Baruch Lev and Feng Gu, in their new book, The End of Accounting, “Today’s financial reports provide a trifling 5-6 percent of the information relevant to, and used by, investors.” Generally Accepted Accounting Principles and traditional financial statements are suffering from what philosophers call a deteriorating paradigm: the theory gets more and more complex to account for its lack of explanatory power. Baruch Lev and Feng Gu want to change this sorry state. Their sem
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