Slack European business loses out to US
European companies are losing the competitive advantage over US companies because they are taking too long to publish their accounts, according to new research.
The gap continues to widen between the speed with which US companies make their accounts public compared to European businesses, despite a clear willingness to improve, said PwC Consulting.
Jackie Ross, partner at PwC Consulting, said: ‘There has been a change but it is not as big as we hoped or expected.
Ross said that it was imperative European companies speed up their process because key events such as the collapse of Enron, affect the whole stock market and erodes investor confidence in the international community at large, ‘highlighted the need to get information out quickly and accurately’.
The survey of 160 companies headquartered in Europe revealed that the best took five days to sign off their accounts, with the worst taking up to 120 days.
Ross said: ‘What is interesting is that there’s still a sense that quality is more important than timeliness.’
But she said there was no evidence that quality had suffered in the US. In fact, the fastest companies in the US spent less time correcting errors.
‘It’s a slightly spurious argument by European companies,’ said Ross.
European companies lagging behind are still using local accounting standards based on regional regulatory models just three years ahead of the deadline to switch over to international accounting standards in 2005.