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2.11.05
Schroder experiment
Alison Thomas (from PricewaterhouseCoopers), spoke about a recent experiment conducted by PwC and Schroders involving the editing of a firm’s accounts (Coloplast). The experiment involved generating a new abridged, but statutory-compliant version of the accounts that omitted all of the quantified, non-financial data (which is intangible capital) that the firm chooses to report. The two versions of the report, the extensive original and the abridged version were subjected to separate review by separate Schroder investment teams with a task to develop a forecast of revenue and earnings for the next two years.
The experiment revealed interesting results. The group with the complete accounts was overwhelmingly in favour of buying the shares (60 per cent against 20 per cent), while 80 per cent of those who reviewed the abr idged version recommended the sale of the stock (against 40% in the group with the entire reports).
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