Global Accounting Standards Create Uncertainty
ningcontentSurvey Reveals Many CFOs Unsure How IFRS Will Impact Their Organizations
Although it is likely the United States will adopt International Financial Reporting Standards (IFRS) in the coming years, more than half (55 percent) of U.S. financial executives interviewed recently said they are unsure how their companies might be affected by this transition.
The survey was developed by Robert Half Management Resources and was conducted by an independent research firm and includes responses from 1,400 chief financial officers (CFOs) from a stratified random sample of U.S. companies with 20 or more employees.
The movement toward IFRS, an international accounting framework, has resulted from increasing globalization and the related need for a single set of worldwide standards. While no final timeline has been set, the Securities and Exchange Commission (SEC) has proposed a roadmap that would have initially allowed some companies to begin using IFRS by the end of 2009.
CFOs were asked, “If the United States adopts international financial reporting standards, how familiar are you with how your company will be impacted?” Their responses:
| Very familiar | 8% | |
| Somewhat familiar | 31% | |
| Somewhat unfamiliar | 12% | |
| Not familiar at all | 43% | |
| Don’t know/no response | Â Â 6% | |
| Â | 100% |
“Despite lingering uncertainty surrounding the implementation of IFRS, many in the financial community expect the United States to eventually adopt these international accounting rules,” said Paul McDonald, executive director of Robert Half Management Resources. “More than 100 countries are already using IFRS, and proponents believe international standards will bring greater consistency and comparability to corporate financial reporting. Companies that begin preparing now will have an advantage in making a timely and successful transition.”
A new report by Robert Half Management Resources, International Financial Reporting Standards for the United States: Making the Talent Transition, suggests the following actions companies can take now to ensure they are adequately prepared for the new reporting requirements and avoid playing catch up later on:
- Develop an action plan. Diagnose what might have to change. Companies that might be affected by a transition to IFRS should consider, initially at a high level, but later at a more granular level, the potential need for changes to policies, processes and technology.
- Initiate training. A major transition obstacle in the beginning is likely to be a dearth of IFRS knowledge among U.S. financial professionals. Now is a good time for businesses to gain an understanding of the impact of conversion in terms of education and training, and create internal programs that can help them identify and train IFRS specialists.
- Seek internal expertise. Although training is essential, support from professionals who already have firsthand IFRS experience can be highly beneficial. Companies with international operations may be able to access the expertise of employees who work in countries already using IFRS.
- Assess staffing needs. Companies should evaluate the adequacy of existing resources. Does the organization have the right people to manage the transition? Some projects will be of limited duration, so a combination of full-time and project resources may be needed.
- Stay current on industry developments. In addition to paying close attention to SEC guidance, businesses also will benefit from learning how other companies are making the transition.
Robert Half Management Resources has more than 145 locations worldwide and offers online job search services at www.roberthalfmr.com. Please visit http://www.roberthalfmr.com/IFRSUS for a copy of International Financial Reporting Standards for the United States: Making the Talent Transition.
