BW Rankings Drop Companies with Accounting Issues

The crisis of confidence in accounting numbers has grown so severe, it is even affecting the annual rankings published by the business press.

When Business Week published its annual ranking of the top 500 companies by earnings and revenues, it left some companies unranked because their financial statements had raised accounting questions, often accompanied by an investigation by the Securities and Exchange Commission ("After Enron, A Whole New Yardstick," Spring 2002).

"The collapse of Enron has shed a harsh light on the aggressive accounting that was pumping up bottom lines," explains Business Week. "That's why we decided for the first time that we couldn't take at face value some reported numbers."

Business Week says it is not making a judgment on the quality of the accounting of the unranked companies. It just felt it could not rank the companies while the issues remained unresolved. As a result, five companies are listed at the bottom of the ranking of the Standard & Poor's 500. Instead of a numerical ranking, they received the designation "NR" for "not ranked."

The unranked companies are Nvidia Corporation, PNC Financial Services Group, WorldCom Group, Qwest Communications International and Computer Associates International.

"That's not to say that all the companies we did rank are spotless," adds Business Week. "In some cases accounting questions have surfaced, but the issues seem less likely to shift the outfit's financial picture fundamentally. In other instances, companies face serious questions but the problems have been well-publicized and digested by investors."

-Rosemary Schlank

You may like these other stories...

The 2014 proxy season saw significant growth in audit committee transparency, continuing a recent trend of Fortune 100 companies going beyond the minimum disclosures required, according to a new report from Ernst & Young...
The average annual salary for US finance and accounting professionals who have the Certified Management Accountant (CMA) credential has gone up slightly over the past year, according to the results of a new study from the...
As the volume of account reconciliations continues to surge, most corporate accounting and finance departments in the United States and Canada are still using a labor-intensive process to make sure their accounts’...

Already a member? log in here.

Upcoming CPE Webinars

Sep 30This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.