Tweedie makes judgement call
IASB chairman advises principles-based approach to accounting, rather than reliance on standards-setters
Sir David Tweedie has called on auditors and FDs to use their judgement when
faced with complex accounting situations – and stop relying on standard setters
to make their decisions.
Speaking at a London Business School conference, the IASB chairman said the
standard setter favoured a principles-based approach to accounting, which
required FDs and auditors to use their initiative.
‘Principles-based standards require CFOs and auditors to make judgement
calls. They don’t like that, but we can’t deal with everything,’ Tweedie said.
‘If companies and auditors use a standard and come out with wildly different
results, then I will admit we got the standard wrong. But otherwise they need to
make their minds up.
‘The problem facing the profession is how to get the lawyers out of the way,’
Tweedie said. ‘Firms should stop battling against each other. If an auditor is
taken to court for a fair judgement, other firms need to offer their support.’