MOST of the companies which went into liquidation in 1995 did not have timely or reliable financial information on their trading positions, according to a survey of insolvencies by the Institute of Chartered Accountants in Ireland.

Leaving it too late to seek financial information was the main contributor to company liquidations, according to the survey. Some 71 per cent of the 208 companies' involved had not prepared management accounts on a regular basis, 30 per cent had not prepared annual accounts and the most recent audited accounts for 28 per cent of the companies were at least two years out of date.

Bad management was considered the reason for failure of 65 per cent of the companies.

Other factors which contributed to company failures included inadequate finance (24 per cent), market or margin erosion (29 per cent), optimistic planning and accounting (8 per cent), excessive overheads, (8 per cent) and bad debts (7 per cent).

ICAI president Mr Leo O'Donnell described the findings on financial information as "worrying". Timely and accurate financial records are essential if directors and owners are to be kept abreast of the company's trading performance, he said. "Even when the companies had some information they were very slow to address the difficulties. If more people had reacted more quickly then some of the liquidations probably would not have happened," he added.

The ICAI asked insolvency practitioners to complete a detailed questionnaire for each insolvency assignment they carried out in 1995. Information was sought on the ownership structure of the companies, their financial situation, employment levels and the outcome of the insolvency as well as the causes of the failure and the remedial measures which could have prevented failure.

Some 83 per cent of the accountants responded, covering 60 per cent of all insolvency appointments in 1995. Members voluntary liquidations were excluded from the survey.

Over half the companies covered by the survey were based in the greater Dublin area with 9 per cent in Cork, 7 per cent in Limerick/Shannon, 3 per cent in Galway and 3 per cent in Kilkenny/Waterford. Some 80 per cent of the companies were owner-managed while 59 per cent were family-controlled firms.

Manufacturing was the largest sector accounting for 22 per cent of the failures. It was followed by construction at 21 per cent, wholesale/distribution at 14 per cent and retail at 11 per cent.

Almost one third of the companies had turnover of under £500,000 and 40 per cent had total liabilities of under £100,000.