Nothing less than a rewrite of the rules of accounting is required

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I have just noted the problems with auditing that have been reported in the financial press this morning. So has the FT. But as it, rather wisely, notes:

Rubbish auditors may not be the only problem. The FRC should worry about rubbish accounting standards too.

The discussion in the FT is about how Carillion almost halved in value as a result of a change in accounting standards in 2017. But is not the change that worries me, or the FT. It is the fact that fair value accounting is conceptually flawed and only designed to suit the needs of financial markets and no other stakeholders of a company that worries me.

Nothing less than a complete rewrite of the rules is required. The first Corporate Accountability Standard from the Corporate Accountability Network is launched on Friday.