In the wake of the meltdowns at Enron and WorldCom, it was easy to find British voices saying “It couldn’t happen here.” However, following a cluster of accounting mishaps, the refrain does not ring as true as it once did.

Interserve, a support services group, last month suspended six employees following the discovery of accounting irregularities.

Isoft, a software-maker, is facing an external probe over questionable numbers in its accounts while Sanctuary, the music group, is getting used to life without Andy Taylor, its founder and former chief executive, who the company says it dismissed in May over accounting errors and other issues.

The revelations have not shaken market confidence and do not threaten to match those in the US but the unusual confluence of troubles raises questions for investors about whether something rotten in the system is starting to eat away at market capitalisations.

The cases serve as a reminder that pressure on management to meet short-term performance targets is as intense as ever.

In different ways and at different levels, managers appear to have dressed up the success of their businesses. It is reasonable to suspect performance-related pay as a possible influence, said Paul Nagy, European analyst at the Center for Financial Research and Analysis.

“The vast majority of senior management are compensated with stock options, which didn’t used to be so prevalent in Europe, so the share price is extremely important,” he said. “There is a lot of pressure to meet earnings expectations.”

Small-cap investors will also be troubled by the size of the companies involved.

The biggest is Interserve, capitalised at about £360m, which sits close to the bottom of the FTSE 250 index. Isoft is valued at £110m and Sanctuary at just £41m.

Multi-billion pound blue chips have been largely free of reporting controversies since Royal Dutch Shell’s 2004 shock revision of its oil and gas reserves.

However, market watchers say it is not surprising to find more irregularities outside of the big league. “Smaller companies probably have less developed accounting systems and controls than larger ones,” said Stuart Duncan, financials analyst at Numis Securities.

New regulations also mean multinationals are under more scrutiny.