Beware US 'disease'.
The APB hopes the publication of a consultation paper will bring the issue of 'aggressive earnings management', also described as 'wrong accounting', to the forefront of a profession at the receiving end of corporate scandals.
Ian Plaistowe, APB chairman, said: ‘There are signs that the disease is coming to the UK. In the US, 464 sets of financial statements have had to be restated in the last three years.’
Wrong accounting, explained Plaistowe, is a result of pressures on directors; including tactics to stretch company earnings to match expectations and to understate profits to reduce tax liabilities. Changes in remuneration packages are also a factor. Directors’ and management incomes are linked to results.
Full story at www.accountancyage.com/Practice/1122437.