US 'not ready for IFRS transition'

The US is not ready for IFRS, a former chief accountant of the Securities and Exchange Commission has said, despite the home of the world’s largest capital markets making rapid moves towards allowing the use of the accounting rules.

Very few US investors ‘understand, let alone know IFRS’, Lynn Turner told Accountancy Age this week. ‘As a result, their ability to analyse the financial statements of companies preparing IFRS in a meaningful fashion will be limited at best, especially without the reconciliation which does provide context for such analysis,’ he said.
Turner was chief accountant at the SEC until 2001. The body is consulting on allowing companies to file under international standards.

‘There are just about no professors teaching IFRS in this country… and almost no professors who themselves have a working knowledge of IFRS’.

‘That in and of itself is a sad state of affairs here, but clearly highlights the obstacles that need to be overcome if there is to be convergence on a set of high-quality international standards,’ he said.

Robert Herz, chairman of the US standard setter, the Financial Accounting Standards Board, this week spoke of a ‘national plan’ that would move all companies in the US towards the use of IFRS.