Like all true Scots, Sir David Tweedie loves a good scrap. It was once said that “he would cross a motorway to pick a fight”.
Right now he finds himself caught up in the Enron storm – as the chief advocate for international accounting standards – and is relishing the battles ahead.
On his office wall in London hangs a framed 1991 article from The Scotsman newspaper headlined “The most hated accountant in Britain?” As chairman of the International Accounting Standards Board, he may become the most hated accountant in the world.
The piece dates from his time as chairman of the UK’s Accounting Standards Board, where he developed a reputation for outspokenness that should serve him well in his new global role. He forced through unpopular changes – opposed by auditors and companies – but his 10-year chairmanship of the ASB, which ended in 2000, is widely seen as restoring credibility to UK accounting standards.
In particular, Tweedie takes pride in his success in stopping off-balance-sheet financing in the UK and banning acquisition provisioning and “big bath” or “kitchen sink” provisioning by companies.
It was not accomplished without a fight. In one famous retaliation against Ernst&Young over accounting standards, he described the firm as having “all the vision of a mole and the eloquence of a whoopee cushion”.
He has been leading the IASB since its formation in 2001 and, like many people, believes its time has come. The Enron affair has put the spotlight on accounting rules – and, above all, the need for global standards.
Tweedie’s drive to persuade US lawmakers to adopt international standards will be aided by the high personal regard in which he is held in the US. Also helpful will be the fact that the chairman of the IASB’s board of trustees is former Federal Reserve chairman Paul Volcker – the man also charged with reforming the accounting profession.
Tweedie and Volcker have already made their pitch on Capitol Hill, testifying before the Senate committee on banking, housing and urban affairs on February 14. In his evidence, Tweedie described the financial reporting standards that he intends to introduce around the world as “the gold standard”.
“Our work will probably require tough decisions and unpopular standards,” he told committee members. That’s putting it mildly. He has told Euromoney that he expects “a lot of squealing” from the business community.
But he is looking forward to the fight. Having long championed tough but simple accounting standards, his cause is now in the limelight.
