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4 Mar 2014 03:50pm

Tales from the frontline: Dame Mary Keegan

Dame Mary Keegan, DBE, former head of government finance and winner of the ICAEW Outstanding Achievement Award 2014, on international accounting standards

When I was a new university graduate, on the brink of starting my ACA studies, a partner at Price Waterhouse (now PwC) gave me a piece of advice that I have never forgotten: “Other firms throw you in the deep end and see whether you sink or swim, but we teach you to breathe underwater.”

True to his word, that’s exactly what PwC did. At just 32, I became the firm’s first female audit partner and, nine years later, I was appointed director of professional standards in Europe, a role which had not previously existed and of which I had little understanding. Yet it is a role that shaped my career and, in its way, equipped me to make a valuable contribution when I left PwC for Whitehall.

As was the case with many of my previous roles, I accepted the directorship knowing I wasn’t fully ready but determined to meet the challenge. Yet as soon as I began looking into the issue of professional standards in Europe, it became apparent just how different approaches to accounting, ethics, audit and company law really were in each country.

But the more I thought about it, the more it didn’t make sense to focus solely on creating a uniform set of European standards, as some in Brussels were suggesting.

Doing that would have created a European bloc, effectively separating us from the Americans (who, at this point, had good US GAAP and GAAS). It would also have opened up even more questions. For example, would the Russians and Chinese have used American standards or European standards? I felt very strongly that we should instead create a stronger set of international standards. And a set that people actually used.

Unsurprisingly there were a lot of sceptics. What was surprising is that those sceptics weren’t just the Americans – even within the UK there was some reticence. After all, the UK already had such a strong set of standards, a lot of people started asking, “why bother with international standards at all?” However the risk was, if the UK was not involved and intending to use the international standards, we wouldn’t have had a role at the table when it came to setting them.

What also won people around was a survey that PwC and six other firms conducted in the 1990s, which compared local accounting standards in 53 countries to the benchmark of international standards. Only then could others also see just how great that gulf was, and how potentially dangerous it was to rely on foreign accounts which you did not understand when doing your business abroad.

Challenging though it was to push for countries to adopt international standards, it was also exciting. Everywhere you went, people were discussing what we should do about accountancy standards.

Standing back today – more than 20 years on – it is clear just how far we have come, and I am delighted to have been awarded an ICAEW Outstanding Achievement Award this month, in recognition of that team effort.

Back in the 1990s, it was very difficult for institutes in different countries to communicate but they’re now all talking the same language. Yes, the American and international standards might not be completely identical, but they are far more linked and close to being in the same place.

Certainly, I am proud of what we achieved in the 1990s – our team made a huge change to the profession – yet that fight isn’t fully over. But those in power and practice today can’t afford to rest on the changes that have already been made. It’s vital to keep pushing for full convergence, and to keep those standards up to date. After all, if businesses are constantly moving on, so should the profession and its standards.

 

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