What Accountants Must Know About Maximizing Shareholder Value
Clarke, C., Friedman, H. H., and Kass-Shraibman, F. (2016). What accountants must know about maximizing shareholder value. Journal of the CPA Practitioner, 8(1), August, 10-12
3 Pages Posted: 10 Aug 2016
Date Written: August 1, 2016
A fundamental principle taught to all accounting and business students is that the goal of the firm is maximization of shareholder value (MSV). In order for accountants and auditors to provide firms with ethical recommendations that keep it strong and healthy, they must understand the negative consequences of MSV as a business philosophy. The authors provide several arguments to demonstrate why it is crucial for accountants to encourage management to move away from MSV as a philosophy and embrace maximizing stakeholder value as the preferred philosophy.
Keywords: Maximizing shareholder value, GAAP, stock buybacks, business ethics, and customer satisfaction
JEL Classification: A22, A23, G18, G21, G28, M14
Suggested Citation: Suggested Citation