Five years after Enron, corporate financial reporting stands at a crossroads.

One route leads deep into the lightly charted terrain of “principles-based” reporting, where thousands of rules and regulations would be replaced by a relative handful of guiding precepts. The norm in Europe, this would be terra incognita of the most profound sort for American companies. Proponents argue that the unceasing torrent of new standards and regulations is creating an unworkable system. Foes counter that if the existing rules failed to prevent corruption and provide transparency, a system based on vague pronouncements is doomed to fail.

The alternative path entails a continuing series of changes to the status quo that would undoubtedly increase complexity even as they attempt to improve transparency and accountability. No issue underscores these concerns more dramatically than fair-value accounting, in which assets and liabilities are marked to market rather than recorded at historical cost. The degree to which fair-value accounting is embraced (or not) will have a major impact on the very nature of corporate finance.

In short, Sarbanes-Oxley was just a warm-up for what lies ahead. In this special report, we examine the issues raised by principles-based accounting and disclosure, fair-value measurement, and improved financial transparency. We also include a poll of CFOs who have much to say about these issues. And, perhaps, much to learn.

For more on The Future of Reporting, click on any of the stories below:

•Standing on Principles
In a world with more regulation than ever, can the accounting rulebook be thrown away?
•Progress Report
A CFO survey finds finance executives surprisingly amenable to further reform of the financial reporting system.

•Will Fair Value Fly?
Fair-value accounting could change the very basis of corporate finance.

•The Case for Clarity
You know about the cost of Sarbox. What about the benefits?
•Days in Court
Would principles-based accounting result in fewer lawsuits, or make them blossom?
•Will You Still Matter?
Financial reports, says FASB, are not about measuring management.