Auditors prepare for first IFRS test

While the financial world will be quite rightly focusing most of its
attention on the companies that are producing annual results under IFRS for the
first time, and the potential problems the event may reveal, there is another
group that will be equally under pressure.

As the trickle of IFRS results starts to turn into a flood during reporting
season, it must be borne in mind that not only is it companies that are largely
newcomers to the IFRS experience, but also that it is the opening gambit for the
auditors that have to pore over such figures. This, in turn, could throw up some
issues of its own.

Anecdotal evidence from those involved with IFRS at some of the largest
firms, suggests that while staff have been training on IFRS for several years
now, issues that would have been unpredictable have cropped up in many areas,
and a general consensus on how accounts should be treated is still some way off.

‘You have to remember that, despite all the training and education that has
been put in by the firms during the past few years, for the large majority of
auditors this will be the first time that they are dealing with IFRS for real,’
said one Big Four source.

He confirmed that the current round of reporting was going to be a ‘learning
experience for everyone involved’.

Following this year’s reporting season, firms will be looking around to see
how certain standards have been dealt with elsewhere. This is likely to include
whether fellow auditors at different national branches of their own firm
addressed the same issues in the same way, and also how different firms treated
companies in the clients’ industry sector.

This information will then be used to see where processes could be improved
for next year, and where things are working well.