(FORTUNE Magazine) – Here's a radical idea for you: Financial markets are efficient, which means the values they place on companies are correct. The investors who make up the markets aren't boneheads; they can usually see through accounting smoke screens to the economic reality of a corporation. When they fear that they can't, their suspicion punishes companies--even innocent ones--by keeping stock prices down. So there's no point in massaging your earnings so that they come out pretty. To keep your stock price up--and, by extension, your capital costs down--the best strategy is simply to tell the truth, and lots of it. Much more of it, in fact, than the Securities and Exchange Commission or Generally Accepted Accounting Principles require.

All this is actually pretty standard thinking among academics in the fields of accounting and finance. That it has never caught on among the people who count--chief executives and chief financial officers--is a source of endless head-shaking among the professors. "The same managers who spend fortunes for market research on products and services are not willing to spend a dime to find out what capital markets want to know about their companies," says one of the head-shakers, Paul Miller.

Now Miller, an accounting professor at the University of Colorado at Colorado Springs, is out to change all that. He wants corporate America--which has gone through wrenching changes in the past two decades in how it looks at customer satisfaction, product quality, and inventory management--to undergo a similar transformation in financial reporting.

Miller's crusade hasn't gotten very far yet; his preaching has been confined to already converted groups like the Financial Accounting Standards Board. But he'd love to share his dream with corporate America as well--if only he could get somebody to invite him in for a board meeting. What Miller envisions is a world in which corporations no longer see financial reporting as an aggravation imposed upon them by the SEC. Instead, they'll battle one another to see who can disclose the most. They'll provide detailed, forward-looking information to help investors predict future cash flows. They'll issue financial statements monthly or weekly, instead of just quarterly. As a result, investors' uncertainty will be reduced. That will make them willing to pay higher prices for stock, and willing to accept lower interest rates on corporate bonds.

Miller admits that when he gets going it can sound as if he's moralizing. In fact, he is moralizing. Point out to him that sometimes, over short periods, accounting artistry can fool investors and be a balm to a company's stock price, and he'll retort: "If you could walk into a bank and get away with robbing it, that'd be a good thing too."

Still, there are decades of dispassionate academic journal articles backing Miller up. There are widely accepted theories that explain how uncertainty and inadequate information increase investors' risks--and thus drive up the price investors demand for their capital. What there isn't is proof. Nobody yet has been able to devise an empirical test to show that more disclosure equals higher stock prices. Some have come close: One recent study found that companies that are forthcoming about disclosure practices are followed by more securities analysts than their less obliging counterparts. All it takes is the inferential leap that more analysts touting your stock means a higher stock price.

That is clearly not, however, a leap most chief executives and chief financial officers are willing to make. "I believe in disclosure to a point," says John Chambers, CEO of Cisco Systems. "But if we were to disclose everything at every point in time, we would drive the financial markets crazy."

Adds Jerome York, the former Chrysler and IBM CFO who is now vice chairman of Kirk Kerkorian's Tracinda Corp.: "Markets, be they efficient, still hate two things. They hate volatility, and they hate surprises."

Miller counters that the investors who most hate volatility and surprises--usually mutual fund managers obsessed with market averages--are the ones whom corporate managements should not cater to. "A management needs to consciously and deliberately choose which segment of the market it will deal with," he says. "Fuller financial reporting will attract investors who are looking for a management they can trust to perform consistently over the long run."

That sounds appealing, but Miller has to concede the absence of any corporate leaders willing to buy into his theories completely (though he does have nice things to say about the financial candor available from Berkshire Hathaway and Thermo Electron). He's not giving up. Is there a corporate board out there willing to give the whole truth a try?