ICAEW: global accounting rules needed for financial crisis
17 Apr 2009, Accountancy Age, AccountancyAge
http://www.accountancyage.com/aa/news/1775139/icaew-global-accounting-rules-financial-crisis
The ICAEW institute has urged the US Securities and Exchange Commission to decide quickly on a timetable for moving to International Financial Reporting Standards in order to limit uncertainty for US companies.
In its submission to the US markets watchdog's consultation on IFRS, Europe’s largest professional accountancy body said the global financial crisis had highlighted the need for global accounting rules.
Nigel Sleigh-Johnson, head of the ICAEW’s financial reporting faculty, said: 'The close scrutiny of accounting for financial instruments during the financial crisis has made the need for comparable financial reporting even more obvious.'
'We believe strongly that the transition by US companies to IFRS would not only benefit US companies, but the whole world, as it will improve transparency and comparability globally.'
The comments come amid growing opposition to global accounting standards in the US.
Earlier this month, Paul Boyle, chief executive of the UK's chief financial regulator, the Financial Reporting Council, said adoption of international accounting standards for all listed US companies will not be achieved by 2014, potentially threatening global convergence efforts.
The adoption of IFRS in the US will only succeed by educating people who use and prepare company accounts, the ICAEW also said in its submission.
The ICAEW added: 'We know from our 2007 study into IFRS implementation across the EU that companies need a significant amount of time to prepare properly. A 2011 decision with potential mandatory use of IFRS from 2014 might be tight.'
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Visitor comments
IFRS offers the opportunity to utilise the asset register to maximise business benefits
IFRS offers the opportunity to utilise the asset register to maximise business benefits. It?s true that the new IFRS reporting complexity combined with an extraordinary increase in asset numbers does present a series of challenges to financial departments. But the new standards will, in time, offer tangible business benefits and increased cost efficiencies which will make any disruption caused during this transitionary period, as organisations completely readdress their asset register requirements, seem like a very necessary catalyst leading ultimately to a far more productive time.
A centralised, automated asset register is key if organisations are to reap the maximum benefits. This vital tool will not only streamline year end audits and reduce the reliance on specific, skilled personnel but will also provide the detailed insight into corporate assets required to enhance capital expenditure decision making.
Once established, this new set of standards will offer an astonishing level of visibility throughout the fixed asset register, maximising business value, streamlining processes and allowing organisations to achieve their full business potential through the prudent management of resources.
Yours faithfully,
Karen Conneely
Group Commercial Manager
Real Asset Management
www.realassetmgt.co.uk
Posted by: Karen Conneely , 20 Apr 2009 | 00:00
US Shareholder Advocate
ICAEW and others fail to make the case that IFRS adoption will increase shareholder wealth. If you are asking shareholders to pony up tens of millions of dollars (billions when aggregated) for a global compliance/cooperation exercise. I suggest IFRS public relations & sales pitch include tangible financial benefits and the IFRS advocates provide written accounting of the costs and benefits. Stakeholders expect to see a return on their investment. A single accounting standard is not a tangible financial benefit by itself.
Mandating IFRS in the midst of this financial crisis is a really bad idea for American Shareholders. Who benefits?
Posted by: averagejoeshareholder , 20 Apr 2009 | 00:00