Last week I sat in an audit committee meeting of a smallish listed company. I was intrigued to hear both the finance director and audit partner declare that the accountancy profession had “lost the plot”. Or rather, the mandarins who decide on accounting standards had.

The company had just been through the agonies of adopting international financial reporting standards (IFRS), which means the notes to this year’s accounts cover almost 60 pages. The finance director described the process of preparing the 2007 audit as a “world of pain”. This way lies madness – for a smaller company at least.