Businessweek Archives

Accountants Want More Accountability

Up Front


Accountants, who have been zapped by megabuck judgments after S&Ls and other healthy-seeming clients collapsed, are pushing to make financial statements disclose more info. To the dismay of Corporate America, a blue-ribbon committee of the American Institute of Certified Public Accountants is about to call for breaking out more detailed financial results of a company's divisions. Most corporations prefer to glom them together. That way, shareholders don't know when strong units support management-favored weak ones.

Other disclosure proposals from the accountants include discussing fully the risks of such exotic financial instruments as derivatives and off-balance-sheet financial arrangements. One novel idea: Produce a separate fourth-quarter report instead of lumping the numbers in with the annual report's results.

The organization's thinking carries weight with the rulemaking Financial Accounting Standards Board and the SEC. But a panel of the Financial Executives Institute says there are more than enough data out there.EDITED BY LARRY LIGHT AND JULIE TILSNER By Michael Schroeder

The Good Business Issue
blog comments powered by Disqus