PracticeConsultingTough rules increase profit warnings.

Tough rules increase profit warnings.

UK auditors say dubious accounting practices will continue unless pressure is eased on company directors to overstate results, writes Michelle Perry.

The caution follows the rise in profit warnings and an Auditing Practices Board consultation document on ‘aggressive earnings management’ – massaging the books to make results look better.

Mark Dixon, chief executive of office rental company Regus, which recently issued a profit warning, said: ‘We’re not the first company and we won’t be the last. There are a lot more companies out there that should be issuing warnings now.’

Deloitte & Touche said: ‘More consideration needs to be given to what could be done to prevent the increasing pressure on directors to carry out aggressive earnings management.’

More on the APB consultation at www.accountancyage.com/Practice/1122437

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