3 ms·
It's harder (though not impossible) to lie about revenue as a public company when your accounts are audited annually. Online metrics aren't subject to the same
by yaseer 5y ago
It's harder (though not impossible) to lie about revenue as a public company when your accounts are audited annually.
Online metrics aren't subject to the same level of scrutiny as standard financial statements. It's pretty common to see startups distort their metrics, but far fewer get away with falsifying their accounts.
I can imagine a future though when these metrics come under more legal scrutiny, just as accounting does now.
- ikerdanzel 5y agoMany companies are audited annually that fake the books and gone. Not saying FB doing this, but there are plenty of precedents and those are the ones caught with their pants down. FB can easily be doing this and get off easily. If there is poor regulatory (America in the past 2 decades have conclusively demonstrated that) plus immense pressure to deliver numbers even against reality, it is a hard devil temptation to ignore.
- vmception 5y agoPublic companies routinely "restate earnings results" years later after a whole new C-Suite is saddled with the problem and after all the prior personnel and traders at the time of the original earnings already got their profits. It is disingenuous to say this is working well, assuming "well" means "prevent lying because 'audit'". It is working well for generating profits with minimal consequences for anyone.
- yaseer 5y agoTo be clear, I wasn't implying it's working well. Just that financial statements have a legal framework and auditing system, whereas metrics don't even have that.