When both company bosses and fund managers agree that quarterly earnings forecasts harm US business it is time to listen. The Business Round-table Institute for Corporate Ethics and the CFA Institute say in a new report that the practice "leads to the unintended consequences of destroying long-term value, decreasing market efficiency, reducing investment returns, and impeding efforts to strengthen corporate governance". None of those consequences is good.

The investment community has, in effect, been asking companies to lie to them four times a year. Few investment projects deliver a return inside three months. Investments by an oil company in a new production field take decades and a quarterly forecast means nothing. What is worse, as any schoolboy will tell you, is that lies once told are not forgotten. Quarterly forecasts can only be met if a company is managed toward them. Pressure to hit quarterly numbers is one factor behind the culture of lies that devoured Enron.