Corporate Finance & Governance | Financial Planning | XBRL

Enhanced business reporting: Its time has come

TransparentAs Wall Street continues its wild roller coaster ride, we’re hearing one word more than any other coming out of the mouths of regulators and legislators -- “transparency.”

That's hardly a surprise. The need for transparent business information is greater than ever; some are saying a lack of transparency may be one of the root causes of this financial crisis.

Lesser known is the fact that a tool has been under development for years now that promotes transparency in financial reports and makes it easier for investors to make decisions about where to put their money.

That tool is enhanced business reporting, or EBR. An enhanced business report would include much more than just the bottom-line numbers. It would include key performance indicators like employee turnover and information about, for example, patent portfolios or research and development. It could change Wall Street’s focus on short-term earnings projections and offer insight into how companies are creating value over the long haul. Experts say the results could include greater investor loyalty and lower stock-price volatility -- and who couldn’t use a little more of that these days?

It’s been a while since we’ve heard much from the world of EBR, so I thought I’d check in with Bob Laux to find out what’s been going on. Laux is director of financial accounting and reporting for Microsoft and a member of the Enhanced Business Reporting Consortium. He’s been at the forefront of EBR from almost the very beginning, so let’s listen in as he gives us an update on the state of enhanced business reporting today in this MACPA podcast.

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Would enhanced business reporting have helped thwart the financial crisis? Let us know what you think, then check out our other EBR resources.

Related CPE in Second Life
Laux will present "Increasing Transparency: Enhanced Business Reporting" at noon on Oct. 23. The free session, which will take a closer look at the benefits EBR offers to companies and investors alike, will be held virtually on CPA Island, the MACPA’s headquarters in the virtual world of Second Life. Get details and register here.


Bill Sheridan