The committee, established by the Stock Exchange and the Institute of Chartered Accountants in England and Wales, was forced to throw out many of the 150 reports nominated by the Exchange's listings department because they were "disappointing," said its chairman, Richard Sykes QC.
"We found some real horrors tucked away in them," Mr Sykes said. He added that most of the problems were with smaller companies. "There were factual errors within the narrative, and points when the narrative and the accounts didn't tie up."
In some cases, the audited accounts would detail the performance of two divisions, while the chairman's report would refer to three. "It appears to be because they're very coy and want to hide things," Mr Sykes said. "It leaves the reader in a state of total confusion."
In other cases, dramatic changes in the year-on-year results were glossed over in the written portion of the reports. "Sometimes they were not prepared to face some disaster," said Mr Sykes.
"There would be no obvious explanation - like an extraordinary item - or there would be an explanation that was scarcely credible."
Although the accounts and the director's report have to be audited, and must meet both statutory and Stock Exchange Yellow Book standards, the written report does not face such stringent controls.
Nigel Atkinson, the Stock Exchange's head of listings, said about 5 per cent of the reports and accounts his department received had problems but that they were almost always minor.