At a Senate committee hearing today, Sir David Tweedie, chairman of the International Accounting Standards Board, called for the adoption of international accounting standards by the US and warned members 'most of these changes will be controversial and you will be asked to stop them, I'm absolutely sure'.
Tweedie’s call for international standards was echoed by Paul Volcker, chairman of the Trustees of the IASB and Andersen’s Independent Oversight Board.
‘The general case for international accounting standards has been clear for a long time,’ Volcker said.
After provoking members by joking ‘it’s good to be back in the colonies’ Tweedie stopped short of saying that international standards could have prevented Enron.
‘I don’t plan to comment on the specifics of Enron,’ he said. ‘None of us know enough yet to have a solid opinion.’
Tweedie explained that the IASB’s objective is to develop ‘high quality global accountancy standards’.
‘We have no intention to water down existing standards,’ he insisted.
He added: ‘US standards can’t impose a ceiling. If US standards are a ceiling then we can only meet this or be worse. We intend to be better,’ he said. ‘If neither the US nor the international standard is good enoughwe’ll find another.’
Some of the issues Tweedie flagged up included off balance sheet reporting, how to account for stock payments, fair value and intangibles.
Several politicians voiced concerns that the SEC is not well funded enough and asked Tweedie to explain the funding of accountancy regulation is funded in theUK.
In response to another question Tweedie said: ‘It does take the US to move as well as [the IASB]. Some of your standards aren’t as good as theinternational.’
‘There might be six or seven changes but the whole world won’t be torn apart,’ he predicted.