-International investors want German companies to improve their financial reporting and to be more candid about their business prospects, according to a new survey.
'The most widespread cause of irritation is a general tendency for German managements to be too optimistic about their companies' prospects and not candid enough about emerging problems,' the report says. 'Many companies present their figures in a form which is not acceptable to international investors, with inadequate disclosure, a variety of accounting principles being applied, and profit-smoothing from hidden reserves.'
'In general, investors believe that German corporate culture has not been open enough in recent years to enable companies to communicate in the ways financial markets would like to see, and that much of German management has not been educated to act in this way,' the report says. 'At the same time, the German regulatory system has not required them to be more open.'
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