The Con Men

11

All the books are cooked: the trouble with company accounts

We don’t break the law.

Kenneth Lay, CEO of Enron (died in 2006 while awaiting sentencing for fraud)

Most of us don’t realise that there are no universal standards of accounting, although there is currently an ongoing effort to persuade countries across the world to adopt and properly implement the ‘International Financial Reporting Standards’ (IFRS), which would go some way towards this goal. The lack of a universal standard makes it extremely difficult to compare the performance of apparently similar companies operating in different countries, or even in the same country. Much of what you read about ways to pick bargain shares by analysing their accounts only applies in the US, ...