Investors in arms race with 'savvy finance directors'

Fund manager begins screening for accounting 'spin'

Schroders, the fund managers, has said it believes companies will have made mistakes using international accounting standards and has begun screening some businesses looking for accounting practices that could cause trouble in an economic downturn.

Reuters reports that in a note for investors the fund manager's head of European and UK credit research, Patrick McCullagh, wrote: 'Investors are in something of an arms race against savvy finance directors.'

McCullagh said that only when the economy is suffering 'does the accounting "spin" become unsustainable.'

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