Excuses, excuses

But the last six months have seen what was once an occasional business practice become commonplace.

Among the post-September 11 spate of profit warnings, there was little doubt that many companies were using a climate that was braced for bad news to bring a good few skeletons out of the cupboard. The factors that had accounted for a sizeable number of the depressed sales figures and profits warnings had little to do with the New York attacks; they had been around for months and, in some cases, years.

Similarly in the wake of the Enron collapse, companies seem to have discovered a self-help organisation called Auditors Anonymous.

‘My name is (insert name of company with complicated financial arrangements here),’ runs the new mantra. ‘And I’ve been using off-balance sheet vehicles.’ A public ‘confession’ to the market normally ensues though, just as many of the organisations that use Anonymous within their titles know, many individuals continue to deny they have a problem.

The same is true of FRS17. An accounting rule change has not forced people to switch from final salary to money purchase pension schemes.

It may have made them ask some tough questions, but an argument blaming the Accounting Standards Board for jeopardising the future pension provisions of the nation – or indeed, by implication, to credit it with improvements in healthcare that have helped create an ageing population – does not really stand up.

Would the same thing have happened if we had been in the middle of a bull market? It’s doubtful.

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