NEW YORK (CNN/Money) - After Enron, Tyco, Worldcom et al, U.S. companies have fallen from grace in global investors' minds faster than Robert Downey Jr. dropped from Hollywood A-lists. But perhaps the distrust has become too extreme.

Fund managers around the world now view the quality of earnings in the U.S. as the worst in the world, according to a monthly Merrill Lynch survey. Of the managers Merrill polled, 34 percent said they thought U.S. profits were the most opaque, volatile and hard to predict. Next down the list was Japan (until recently poster child for corporate obfuscation), coming in at 28 percent, then emerging markets, at 24 percent.

It's a huge reversal. Back in January most of the investors Merrill surveyed -- 57 percent -- thought that U.S. earnings quality was the best in the world. The rapidly growing mistrust in companies' reported numbers has translated into a retreat from U.S. stocks and a sharp drop in the dollar, which Tuesday fell to a 2 1/2-year low against the euro and a 17-month low against the yen.

Which region's earnings quality is worst? Percent of fund managers saying: Region  July  June  May  April  U.S.  34%  27%  17%  11%  Eurozone  4  2  2  2  U.K.  1  0  1  1  Japan  28  36  45  49  Emerging markets  24  25  24  26  Don't know  11  10  10  12   Source:  Merrill Lynch

"This explains a lot of what's going on in the market," said Merrill global strategist David Bowers of the survey. "The idea that U.S. earnings quality is worse than Japan or emerging markets really isn't true, but it shows how spooked investors are."

For years one of the big selling points in the United States has been that earnings quality here was the highest in the world. Profits didn't bounce up and down as much as in other places. With the possible exception of Britain, U.S. regulatory standards were deemed the highest in the world -- you knew what you were buying. As a result of investors paid premium prices for U.S. stocks. With the raft of accounting scandals the old perception has been challenged, although some think it's a long time coming.

"I've said for decades that English-speaking countries are the worst," said Jean-Marie Eveillard, a global mutual fund manager for SoGen.

He swears he doesn't think that just because he's French. It's just that in the Anglo countries there are more people in the equity game, from individual investors to executives with heavy stock options packages to Wall Street firms looking to drum up fees. It was (or it seemed to be) in everyone's interest to overstate things.

Most people's views aren't so extreme as Eveillard's. Continental Europe, with its sleepy regulators, its requirements that companies only file once a year, and its heavy government shareholdings, may not have had accounting troubles like the United States merely because nobody is looking very hard.

"You think European companies are without accounting problems? I doubt it," said Trilogy Advisors Chief Investment Officer Bill Sterling. An old Japan-hand, Sterling thinks that no sane fund manager would prefer Tokyo's archaic securities laws, bent on maintaining the status quo, to the United States.

Still, it's clear that the U.S. system isn't all it was cracked up to be.

"In emerging markets circles people are scoffing, 'I told you so,'" said Edward Bozaan, who heads up the EOS Recovery Fund, a hedge fund that focuses on deeply distressed markets.

While U.S. companies were playing loose with the rules, emerging market companies have become increasingly forthright, according to Bozaan. As a result, the disparity between U.S. and emerging markets earnings quality has narrowed -- one reason he thinks emerging markets are a good place to be now. But he does agree that the extreme readings on the Merrill survey show an overreaction.

For Bowers, the question is when that overreaction will reverse itself. He thinks that with investors so dour on the United States there could be a mispricing going on. But that doesn't mean they couldn't get more dour still.