A business group has called for changes to a controversial new accounting standard which is leading to firms closing final salary pension schemes.

The CBI wants amendments to be made to the standard known as FRS17, under which firms have to include pension liabilities on their balance sheets and cannot smooth out short-term fluctuations in equities.

In a letter to the Accounting Standards Board (ASB), director-general Digby Jones said the rule values pension assets in a misleading way and urged the ASB to let firms base the valuation of these assets on the average market value over a period of three years.

The CBI said the new standard was accelerating the number of companies moving away from final salary schemes, and warned that it may encourage fund trustees to adopt short-term performance measurements.

A number of companies, including Marks & Spencer, Iceland, Ernst & Young and Abbey National, have recently closed final salary pensions to new members.

Mr Jones said: ''It is right that the users of comp- any accounts should have access to transparent information.

''But FRS17 is misleading and introduces a degree of volatility into com- pany accounts that fails to reflect the realities of pen- sion scheme financing.''

In a separate move the CBI is also calling on Chancellor Gordon Brown to change tax rules enabling employees to continue working past the normal retirement age on a part-time basis, while drawing a partial company pension.