Sir David Tweedie

Chairman, International Accounting Standards Board, Britain

As chairman of the International Accounting Standards Board (IASB), Sir David Tweedie is the most powerful accountant on the planet. The 59-year-old Scot is charged with overseeing the launch of a new set of international accounting standards (IAS), which will hold sway in as many as 92 countries, from Bahrain to Belgium to Bolivia, by Jan. 1. "With one core set of standards, any company using them can list on any stock exchange anywhere in the world without having to reconcile their accounts to local standards, as they do now," Tweedie says.

The new rules, which were developed in close cooperation with U.S. accounting regulators and the U.S. Securities & Exchange Commission, are a major step toward global harmonization of accounting standards. The aim, Tweedie says, is to simplify accounting practices and make it easier for investors to compare the financials of companies worldwide. It will "break down barriers to investment and trade, and ultimately reduce the cost of capital and stimulate growth," Tweedie says.

Sensible in theory, it has proved enormously complicated and contentious in practice. In Europe alone, more than 7,000 listed companies will switch to IAS next year -- a challenging and costly project. During his three years at the helm of the IASB, Tweedie has spent much of his time listening to the concerns of industry, national regulators, and the European Commission to ensure a smooth transition. He has even managed to push through new rules that call for the expensing of employee stock options, something many U.S. companies complain will, on paper, wipe out an average of 8% of annual corporate earnings.

Another issue has European banks and insurers up in arms: rules for complex financial instruments known as derivatives. The IASB wants companies to show the current value of derivatives on their books every year, but financial firms complain that doing so will make their earnings too volatile. "The estimated total value of derivatives is more than $8 trillion," Tweedie argues. "These are gains or losses that need to be shown on the balance sheet." He is determined to hold his ground. "He's a tough campaigner and hasn't knuckled under to pressure," says Alan Blewitt, chief executive of the Association of Chartered Certified Accountants in London.

The hard-nosed former accounting professor is no stranger to controversy. A decade ago, as head of Britain's Accounting Standards Board, he forced British companies to show pension-fund liabilities on their books, exposing the serious underfunding of some of the country's biggest pension plans. His reforms earned him a knighthood and the animosity of Big Business. Hanging in his London office is a framed newspaper clip from the time dubbing the jovial father of two "the most hated accountant in Britain." He takes it all lightly, saying, "You're never going to get a round of applause in this job." Companies may grumble over the accounting revolution Tweedie has wrought, but no doubt investors will thank him.

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