Just in time for late summer holidays on the beach, Routledge has published a book called The UK Accounting Standards Board, 1990-2000: Restoring Honesty and Trust in Accounting. A snappy title, as I am sure you will agree.

Despite that, this is one of the most engaging business books you are likely to come across. It is witty and conversational and very funny (and, in the spirit of sunshine and openness, I should declare that I wrote the foreword).

The Three Musketeers of the old Accounting Standards Board (ASB), David Tweedie, Allan Cook and Geoff Whittington, transformed UK accounting and financial reporting during that spirited age, and here chat about how it was done.

The whole enterprise was anchored by Geoff Meeks, emeritus professor of financial accounting at Judge Business School, who provides masterful accounts of all the issues and how they were resolved, or not.


Robert Bruce, journalist and accounting commentator

Back at the outset of the ASB’s efforts, financial reporting rules were a shambles

Trusted reporting

One of the points Meeks makes is that ‘between 1994, when the ASB was picking up speed in its reform programme, and 2000, when Tweedie and Whittington departed, inward portfolio investment in UK equities recorded a 20-fold increase. And London played a disproportionate role in international M&A.’ In other words, investors and the business community generally benefit hugely if people appear to have got a grip on financial reporting.

Compare and contrast with UK business and investment today. Back at the outset of the ASB’s efforts, financial reporting rules were a shambles and, aided and abetted by audit partners at the big firms, largely ignored.

In Tweedie as its front man, they had a combination of charm and toughness

As Tweedie, who moved south from Scotland with what had become KPMG, used to say: ‘What was immoral in Edinburgh was frowned upon in the Midlands and was damned good business in the City of London’. He recalls refusing to accept an off-balance sheet scheme that an investment banker was insisting on using. ‘He just looked at me and smiled’, recalls Tweedie, ‘and said, “You’ll never stop us”. I must admit that really was the incentive to stick it to them’.

Team effort

And stick it to them they did. It was a huge team effort. In sharp contrast with political culture today, it was put together by a remarkable civil servant, Sir Ron Dearing, who in the words of Whittington ‘had a very good sense of how to keep it independent and, at the same time, keep it owned by the people who were using it’. As the financial editor of The Times pointed out in 1997: ‘It has been a rare success in state-sponsored, self-led regulation’.

Greater demand for crossborder investment created a demand for international standards

In Tweedie as its front man, they had a combination of charm and toughness.  As Meeks points out in connection with the work to reform the rules on goodwill, ‘Tweedie’s diary for just 1996 includes no fewer than 278 meetings with, or speeches to, outside bodies and individuals’. Cook, Whittington and the rest of the team were not far behind in efforts to listen and persuade.

Outside momentum

Meeks makes the point that all this activity created its own outside momentum. ‘This was a golden age for accounting commentary,’ he writes, ‘with very high-quality discussion of accounting problems and reforms by broadsheet journalists, in professional magazines, and in books.

These contemporary sources have a further advantage: it’s sometimes difficult just from today’s vantage point to recognise the full extent of ASB’s contributions. Some abuses of accounting were so effectively curbed by the ASB that they have fallen out of discussion in modern accounting. Reformed practices which we now take for granted were fiercely resisted at the time’.

The conversations in this book show, in a highly entertaining fashion, how it was all done. But, as Meeks concludes, these successes in part brought about the demise of the ASB as it was. Greater demand for crossborder investment in UK equities created a demand for internationally consistent accounting standards. And that would inevitably lead, on an international stage, to more representation from the US accounting culture, which, being heavily lawyer influenced, always relied more on a mass of rules rather than the underlying principles.

But the book stands testament to the idea that sharper brains and a disarming manner, allied to determination and firm execution, can win the day.