Time to end a scandal

摘要

In an era of corporate scan-dals, one of the biggest has largely escaped attention. So it is good news that America's Securities and Exchange Commission (SEC) is finally taking a look at how some of America's biggest companies have been cyni- cally exploiting the accounting rules that apply to their pension funds. This might seem an esoteric field. It is not immediately clear that much is at stake. In fact, literally billions of dollars have been conjured on to firms' balance sheets and profit and loss accounts in recent years, flattering reported earnings. Without manipulations of their pension accounts, industry icons such as IBM, General Motors and Boeing would have reported drastically worse financial results. By adopting grossly unrealistic return assumptions, many companies have grabbed pension "profits" that might never materialise and will have to be written off eventually (see page 97). If they had accounted for their pension obligations properly, it can be argued, many big firms might even be bankrupt.