Disclosure in the dock

Financial reporting appears to have been worthless in the case of Enron’s spectacular demise and, although instances of fraudulent management are rare, investors have been gripped by the fear that all may not be as it seems, even when accounting rules are correctly applied. David Watts reports.

In the three months since Enron, the world's largest energy company, collapsed, a whole series of revelations about accounting sleights of hand, inflated earnings and dubious ownership structures have come to light. Is that just a coincidence? Yes and no.

Clearly, the Enron scandal is an extreme situation and lies far beyond normal experience, but equally, in one sense it is symptomatic of the bust that has followed on from the boom years. Even without Enron, investors were starting to pay