WHAT CPAS NEED TO KNOW
The increasing acceptance of IFRS, both in the United States and around the world, means that now is the time to become knowledgeable about these changes. Most CPAs will somehow be affected. Once a critical mass of non-U.S. companies in a certain industry sector begin to report their financial results using IFRS, there will likely be pressure for U.S. issuers to do the same, to allow investors to better compare their financial results. But this issue will have an impact far beyond just financial reports. It will affect almost every aspect of a U.S. company’s operations, everything from its information technology systems, to its tax reporting requirements, to the way it tracks stock-based compensation.
For the CPA profession, the use of IFRS by U.S. publicly held companies will create the need for effective training and education. Companies will use IFRS only if they and their auditors have been thoroughly trained, and if their investors and other users of their financial statements — such as analysts and rating agencies — understand IFRS as well. At the moment, most accountants in the United States are trained in U.S. GAAP, not IFRS. Most specialists, such as actuaries and valuation experts, who are engaged by management to assist in measuring certain assets and liabilities also are not taught IFRS. Consequently, all parties will need to undertake comprehensive training. Professional associations and industry groups will need to integrate IFRS into their training materials, publications, testing and certification programs. Colleges and universities will need to include IFRS in their curricula. If IFRS is accepted—and many think this is inevitable—as GAAP in the United States, it will be included in the Uniform CPA Examination.
The bottom line is that CPAs need to begin to prepare for the day in the not-so-distant future when the SEC could designate a date for voluntary, or even mandatory, adoption of IFRS by all U.S. public companies.