Sir David stated his views on the collapse of Enron
04 February 2002
The International Accounting Standards Board (IASB) has noted press articles which quote Sir David Tweedie, Chairman of the IASB, as stating that Enron’s collapse and other recent accounting irregularities could not have occurred under international accounting standards (IAS).
These reports are not correct. Sir David stated his views on Enron’s collapse when he testified before the Committee on Banking, Housing and Urban Affairs of the United States Senate on 14 February 2002:
“None of us knows enough about the specifics of the transactions, the information available to the auditors, and the judgements involved to form a solid professional conclusion. As we learn more, we may find the U.S. accounting standards should be improved. If so, we plan to learn from this case and to make sure that international accounting standards do not have similar problems….
“History is full of examples of those who said ‘it couldn’t happen here’ and came to regret it. I do not plan to repeat that mistake.”
The IASB has already acted in consultation with its partner standard setters throughout the world, including the U.S. Financial Accounting Standards Board, to examine the quality of existing accounting standards in light of issues raised by Enron's. For example, the IASB recently requested that the International Financial Reporting Interpretations Committee (IFRIC) to review SIC 12 Consolidation – Special Purpose Entities. Additionally existing projects on IASB’s work programme address issues raised by recently reported accounting irregularities.
For more information, please refer to page 10 of the Annual Report of the International Accounting Standards Committee Foundation, available at http://www.iasb.org