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

See all articles by Clifton Clarke

Clifton Clarke

Brooklyn College, School of Business

Hershey H. Friedman

City University of New York - Department of Business Management

Frimette Kass

Brooklyn College; Journal of the CPA Practitioner

Date Written: August 1, 2016

Abstract

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

Clarke, Clifton and Friedman, Hershey H. and Kass, Frimette, What Accountants Must Know About Maximizing Shareholder Value (August 1, 2016). 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. Available at SSRN: https://ssrn.com/abstract=2818818

Clifton Clarke

Brooklyn College, School of Business ( email )

2900 Bedford Avenue
Brooklyn, NY 11210
United States

Hershey H. Friedman (Contact Author)

City University of New York - Department of Business Management ( email )

Frimette Kass

Brooklyn College ( email )

2900 Bedford Avenue
Brooklyn, NY 11210
United States

Journal of the CPA Practitioner ( email )

22 Jericho Turnpike, Suite 110
Mineola, NY 11501
United States

HOME PAGE: http://www.nccpap.org

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