The adoption of International Financial Reporting Standards is proving something of a headache for listed UK companies, with many chief executives and other board directors failing to understand the new standards despite them being in force for over a year.

According to a report published by PricewaterhouseCoopers, companies need to spend more time to improve the knowledge of the accounting standards among senior employees.

The survey found that while audit committees are seen as generally knowledgeable about IFRS, one in six FDs believed the board has a ‘poor’ or ‘very poor’ technical understanding of the rules.

The poll also found that implementation costs had been higher than expected without any clear benefits.

Two-thirds of those polled said internal costs had been kept below £500,000, with a similar figure spent externally, but more than 10% of those polled had spent £1m or more.

PwC's Ian Dilks said many finance directors were concerned that the cost and complexity of producing IFRS accounts exceeded the benefits.

‘Their expectation that a major benefit of the new standards would be international comparability is matched by concerns over complexity and increased volatility in reported earnings,’ Dilks said.