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."