IASB's Sir David Tweedie: one chance in a lifetime.

AuthorHeffes, Ellen M.
PositionInternational Standards

Financial Executive's Managing Editor Ellen M. Heffes and FEI's President and CEO Philip B. Livingston recently questioned IASB Chairman Sir David Tweedie on convergence, accounting standards, corporate governance and more.

Imagine trying to get the major countries of the world to agree on one set of accounting standards--with a deadline of 2005. It's a humongous task--and, you'd think, an impossible dream. Yet, to hear Sir David Tweedie describe it, convergence could be just around the corner. Well, around some corner, some time--and on some items, sooner than on others.

"Let's converge on the major principles," says Tweedie, chairman of the London-based International Accounting Standards Board (IASB). Indeed, he explains, the U.S. standards are also principles-based, but then go into a lot of guidance, or rules; internationally, people don't want to do that. "The idea is, let's say, the answer under international accounting is 70 and under U.S. it's 100; that's not acceptable. But if we got it down to a difference of 98 to 100, well, who cares?" As long as agreement can be on a certain level, he argues, "We are all trying to do the same thing.

"It's a one-chance-in-a-lifetime to get everything together," he says of the current climate. Since he took the chairmanship--coming up on two years now--he says the process is working even better than he thought it would. He uses words like: "spirit of cooperation," "very quick" and "agreement" to describe the progress of his team of IASB-member countries, national standard-setters and other constituents, such as FEI.

The Enron debacle, coming just months after Tweedie's new board got going, "changed the game in the sense that you could see the priorities," and that many of those priorities stem from issues related to corporate governance. He lauds FEI for the job it does on corporate governance. "If you have lazy corporate governance, we can produce rules that are coming out of our ears, and the whole thing will be a mess," says Tweedie, who formerly led the United Kingdom Accounting Standards Board.

The way Tweedie sees convergence really nets down to finding who's got the better answer. It could be the U.S., the U.K, another country or even the IAS (International Accounting Standards). The IASB and FASB staffs are currently working together on a major "short-term project," going through differences in the...

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