Next time you see a member of the team that puts together your company's annual report, give that person a pat on the back. They'll need it this year. Coming fresh off 2002–a year in which corporate scandals and accounting shenanigans seemed almost daily revelations–regulators, and more importantly investors, are in no mood to be toyed with, let alone lied to. The premium in year-end wrap-ups must be on telling it straight and telling it simply. In other words, junk the footnotes.

It's all part of the so-called new age of financial disclosure. Executives must now swear to the veracity of financial statements. When trying to woo investors, using pro forma numbers instead of GAAP results can do as much harm as good. And even the proxy statements and lowly little annual reports have new bars to hurdle with respect to which pieces of information must be disclosed and how.

Companies that fall short of at least the appearance of full disclosure face not only harsher penalties from Washington, but also the unfettered wrath of a jittery investor community short on patience and trust. "We are all going to be looking, and those who don't come forward [with full disclosure] will pay dearly," says Nell Minow, a shareholder activist and editor of The Corporate Library, which researches corporate governance issues. "Their cost of capital will reflect the fact that investors don't believe what they say." As Ann Yerger, director of research at the Council of Institutional Investors in Washington, puts it, "full and fair disclosure is not that hard."

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