The conclusions of the inspectors' report on Atlantic Computers should be carved in stone and erected at the boundaries of the City as a memorial to the fevered 1980s.

Pens are too light, take a chisel to write. That's not original, but this lucid report is. A summary should be engraved, at least, on the office walls of all auditors, merchant bank advisers and company directors, and of any budding financier with ambitions to play the next takeover boom.

To begin with, it defies belief that the auditors, Spicer & Pegler, could sign off the accounts for so long of a company that the inspectors concluded probably never made a profit in its entire life. Yet the firm calmly concluded that the reported profits were a true and fair view. Do auditors earn their fees, or do they just sign for them?

Spicer was admittedly not working in the easiest of circumstances. The inspectors say that just before Atlantic's flotation the firm was deliberately deceived by the late John Foulston and by Vernon Davies, co- founders, about the proportion of lease contracts containing options to give up computer equipment.

These were the costly time-bombs that brought the company down. Spicer reported that the 'walk' contracts amounted to 5 per cent of leasing business, a figure that went in the prospectus for the flotation, sponsored by Rothschilds, which was also deceived.

But it was not just the advisers who were made fools of. So were the listing rules, the Stock Exchange and an entire army of investors. And the issue was not just one wildly misleading figure, but an entire method of accounting for profits and future liabilities that the inspectors tear to ribbons in the report.

They clearly believe the methods approved at Atlantic should never have been allowed in the first place. Caveat emptor is right up to a point, but investors deserve far better of advisers and auditors, especially when so many of them have crawled over a company for so long.

If Atlantic was a gigantic rip-off from beginning to end, the foolhardiness of B&C's board in taking it over is spelled out in gory detail.

They were victims in a way of their own propaganda, of years in which they had been praised as brilliant deal makers. John Gunn was just that in his early moneybroking years, when he really knew what he was talking about, and his image was reinforced by a disarming lack of personal pretension.

But the runaway boom and low interest rates of the Lawson era must have made him and his colleagues feel they could walk on water.

As the inspectors say, there was inadequate inquiry into Atlantic by B&C 'due in part to a lack of clarity as to what was expected of those retained to advise B&C, principally BZW, a merchant bank, and Outram Cullinan & Co (OC&C), a firm of strategy consultants'.

Each minimises its involvement, and claims reliance on others, the report says. 'In the evidence before us there was particular dispute as to the proper role and functions of BZW.' That has led to a pounds 600m lawsuit against BZW and countersuits have followed.

The inspectors say: 'Neither BZW nor OC&C recognised the perilous position of Atlantic, but OC&C produced material which should have given B&C warning that Atlantic's reported profits, and the statements made by Atlantic during the course of takeover negotiations, should be approached with considerable caution. Those warning signs, however, went unheeded by B&C'

The conclusion is that B&C acquired Atlantic without a proper understanding of its business, its accounting policies or its leases. 'The subsequent failure of Atlantic illustrates the high risks in seeking growth through the acquisition of quoted companies, particularly in a field in which the acquiror has little experience.'

Your starter for 10: list a dozen other 1980s glamour stocks that have gone the same way, with their inner flaws brought into the open by the bust that followed the Lawson boom.

And once bought, B&C failed to exercise effective stewardship, even though the cause of the collapse was present at the time of the takeover, the inspectors say.

One lesson from the B&C Atlantic saga is that fraud and outright personal greed do not have to be at the heart of something that goes wrong. Ambition, yes, but the inspectors are satisfied that John Gunn, Peter Goldie and Andrew Ashman were acting in what they perceived at the time (but erroneously, say the inspectors) to be in the best interests of B&C. 'They did not act dishonestly in the sense of seeking to defraud any person, or to acquire a benefit for themselves in the course of their dealings with Atlantic and B&C'

In a way, that makes the whole episode still more tragic for those involved. But while they brood, the report should prompt a much wider soul-searching among auditors.