City & Business: Singular standards

TIME was when it was as easy for companies to manipulate their accounts as to walk down the street. All that's changing with the implementation of a series of new rules from the Accounting Standards Board designed to enforce greater disclosure of a company's financial affairs.

No doubt determined managements will always find new ways of dressing up their figures, but the most commonly used scams and loopholes are steadily being closed - so much so that David Tweedie, chairman of the board, jokingly declared last week that from now on he would have to check the wheel nuts on his car.

Change is long overdue. You cannot help but think, however, that the board has missed a trick by drawing up independent British standards. How much better if it had sat down with the Americans and negotiated a common set of international standards on disclosure, accounting for acquisitions, provisioning and the like.

The steady stream of German, French and Italian companies - whose penchant for creative accounting puts Britain in the shade - seeking to raise capital in New York might also have listed in London had the accounting standards been common, helping to consolidate the City's position as Europe's leading international stock market.

Having already been forced to restate their profits US style to comply with New York listing requirements, they are hardly going to do it a third way as well. By choosing in peculiarly British fashion to construct our own way of doing things, we drift as usual out of the mainstream into the backwaters. Another lost opportunity.