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Sir David Tweedie has had a long and distinguished career at the forefront of accountancy on both a domestic and international stage.
He was educated at Edinburgh University, where he gained a BCom in 1966 and a PhD in 1969. Following qualification as a Scottish chartered accountant he was appointed technical director of the Institute of Chartered Accountants of Scotland in 1978. From there he moved in 1982 to the post of national technical partner of the then Thomson McLintock & Co. Following the merger of his firm in 1987 with Peat Marwick Mitchell & Co, he was appointed national technical partner of KPMG Peat Marwick McLintock.
In 1990 he took up the reins as the first full-time chairman of the newly created Accounting Standards Board. It was here than he began to really make his mark. His energy and expertise were instrumental in the development of coherent and universally accepted principles. In clearing up after the corporate excesses of the 1980s, he earned the moniker ‘the most hated accountant in Britain’. He relished the title.
Sir David is a visiting Professor of Accounting in the Management School at Edinburgh University. He has been awarded honorary degrees by seven UK universities, and received the ICAEW’s Founding Societies Centenary Award for 1997 and the CIMA Award in 1998 for services to the profession.
His most recent award was a further honorary degree, bestowed by Oxford Brookes University in September 2004. Oxford Brookes chose Sir David for his contribution to a field of study and as, ‘an exemplary role model for students. ‘His record establishes his standing as the most distinguished member of the profession in the UK,’ the university said.
But it is probably in his present role as chairman of the International Accounting Standards Board that he has faced his greatest challenges and recorded his greatest achievements. Sir David has served with distinction in the position since January 2001, and it is acknowledged that he has brought outstanding qualities to the IASB. He has a unique blend of experience and is widely respected throughout Europe, the Asia/Pacific region and North America.
Sir David has played a significant role in the drive to achieve international harmonisation of accounting standards. He made an important contribution during a hearing in the United States in 2002, part of the investigations into accounting following the collapse of Enron and the involvement of the company’s auditor, Andersen.
Speaking before the US Senate committee on banking in Washington, Sir David said: ‘No individual standard setter has a monopoly on the best solutions on accounting problems.’
His statements were part of the continuing battle with the US Securities and Exchange Commission, which still refuses to give full backing to international standards as the rest of the western world’s financial markets move towards harmonisation.
Despite praising US GAAP, Sir David said: ‘That does not mean that every individual US standard is the best, or that the US approach to standards is the best.’
Sir David, a man famed for being prepared ‘to cross a motorway for a fight’, certainly possesses a robust manner. Addressing the senate banking committee, Sir David opened his evidence with the memorable phrase: ‘It’s good to be back in the colonies.’
Sir David’s stewardship coincides with a period of unprecedented change for the profession. One of the key areas of challenge facing firms and their clients is undoubtedly the requirement to implement IFRS next year. The challenge of change is of course familiar to the profession and clients alike, but on this occasion the scale is truly comprehensive.
Some standards are completely new, some have undergone fundamental changes, and others have been subject to varying degrees of modification.
This creates a steep learning curve for auditors and users of financial statements alike, both in the UK and abroad. The challenge is to understand how to interpret accounting rules on a consistent basis internationally. Different backgrounds inevitably lead to different interpretations, and these will need to be identified and a common approach established.
Sir David’s tenure has coincided with a heated debate within the EU regarding the implementation of the regulatory framework scheduled for 2005. Most attention has focused on the potential problems posed by IAS39 and IAS32 for financial instruments. The then EC commissioner Frits Bolkestein admitted that the new regime would take time to adjust to but said that the compromise reached on IAS39 was a ‘risk worth taking’ rather than going into 2005 without a standard.
Problems are expected as some companies choose to follow the full standard, as determined by the IASB, while others use the EC’s altered version. The perception in the UK of the EU position regarding the adoption of IAS39 is generally felt to be unsatisfactory.
Some uncertainty remains over the application of the adopted standard and its relationship to EU law. Greater clarity may have been achieved following the issuing of guidance from the UK Accounting Standards Board in October 2004.
Sir David’s career has included more light-hearted moments. While examining a published IASB draft rule on business combinations his attention was suddenly diverted. He knew the proposal could prove controversial, but he was amazed to note one of the documents randomly contained passages from the Bible on the front page. Was this a case of the Almighty intervening to achieve international harmonisation of accounting standards?
Another unexpected intervention occurred at the IASB. On a recent conference call among board members, one Antipodean had to be cut out of the call as his snoring was disturbing the discussion.
Sir David can unquestionably look back with immense pride. This award is a fitting tribute to his decades of distinguished service to the profession – long may it continue.