ABSTRACT
Accounting statements have a comforting appearance of complete accuracy because precise figures are given for each of the items reported in the profit and loss account and balance sheet, and because the use of double entry causes the principal accounting statements to articulate with one another and balance. The econornic reality is very different and, despite improvements designed to meet earlier criticisms, published accounts remain under attack. In the early part of the twentieth century their informational value suffered because of obseurity, exeessive summarisation, the use of seeret reserves, the failure to publish a profit and loss account, and the absence of group accounts. Today's perceived deficiencies include the lack of forecast information, the ornission ofassets and liabilities from the balance sheet, the failure to take account ofchanging prices, and the increasing use ofwhat has becorne known as 'creative accounting', i.e. the deliberate selection of aceounting practices designed to transmit a message which management wants user groups to believe, rather than to portray what has actually happened.
