Peter Elwin & team
J.P. Morgan Cazenove
The J.P. Morgan Cazenove duo directed by Peter Elwin repeats in second place. The London-based accountants, applauded by one Frankfurt-based investment manager for their “valuable cross-asset analyses,” are focusing this year on the growing use of pro forma earnings figures that companies report in addition to generally accepted accounting principles earnings. Although analysts and investors find adjusted earnings to be helpful if they clarify or highlight the formal earnings report and “provide a sensible basis for forecasts,” Elwin says, he is “concerned that the extent of inappropriate adjustments could increase in 2013” because of the rising popularity of follow-up releases. Pro forma reporting may omit one-time charges — postmerger restructuring costs, for instance — but such omissions can distort a company’s true financial picture. As for Europe’s sovereign debt crisis, it is now less of an issue from an accounting perspective because “in the main, banks have booked appropriate losses and disclosures have improved significantly,” he adds. — Carolyn Koo