An OFR you can refuse?

In a recent letter to the FT, three fund managers argued that interim results were a waste of time because they did not prevent the Enron affair. Does this show that they were unaware that former Andersen staff were recruited by Enron solely to cover up an auditing mistake and to continue covering it up, or are they expressing an opinion on the competence of UK finance directors?

Former auditors were able to produce fraudulent results in line with market expectations at Enron because shareholders did not order an unannounced independent forensic audit of their preparation. The operating and financial review (OFR) is worthless waffle. The statutory audited actuals will also be an audit of the auditors' opinion of the OFR. This creates an Enron-type conflict, as demonstrated during the conversion of Alliance and Leicester into a bank when the first set of audited actuals were doctored to fit an audited misforecast.

Management accountants prepare more decision-making data every month than was ever envisioned for an annual audit. Publication can start with the annual budget. Owners of the business are entitled to this information and there is no good reason why monthly results should not be published on a website, especially as this allows external agencies and interested parties to analyse the results.

Shareholders must be empowered to decide which accounting information to release and when. CIMA members have a duty to make available the latest data, and the institute should lead the way by publishing its annual budget in monthly format, including a profit and loss account, a balance sheet and a cash flow statement. It should publish each month's accounts with variance analysis in the journal and on the website. Members would also like to see progress on major CIMA projects as well as profit-centre performance.

CIMA must promote the benefits of management accounting for shareholders and thrust financial reporting into the 21st century.

David Murray ACMA