With 27-years of service at media colossus Reuters under his belt, Vince Sloyan is a financial reporting veteran who has seen plenty of changes to corporate reporting during his time at the FTSE100 company.
The task of implementing international financial reporting standards, therefore, landed on Sloyan’s desk and since 2003 he has been leading Reuters’ IFRS project.
‘It has been hard work but we have achieved our targets within the timescale that was set,’ Sloyan says. ‘We approached the transition to IFRS in the same way that we have approached all other projects of this size – by starting from as firm a base as possible.’
In charge of a four-man team, consisting of three qualified accountants and a project manager, Sloyan has been preparing for IFRS. His team has been responsible for everything from identifying and understanding the standards that would have the biggest impact on the group, to training staff and briefing investors and analysts.
Sloyan says the toughest challenge in this undertaking was coming to terms with standards that were in a continual state of flux before the international accounting standards board’s stable platform was put forward.
‘In 2003 the biggest problem was that we were dealing with standards that were constantly changing,’ he says. ‘It was only when the stable platform was introduced in March 2004 and the Accounting Standards Board put forward standards that were robust enough for use that we were really able to move forward with the project.’
With the standards finalised and their impacts identified, the next task for the Reuters’ IFRS team was setting up internal training which involved extensive two-day workshops for finance staff. The initial training programme, consisting of 11 workshops, has been attended by some 300 finance employees.
Sloyan, however, emphasises that it was crucial to equip other staff in the business with the skills to understand the impacts of IFRS. ‘We didn’t just speak to the finance department,’ he explains. ‘The dialogue had to extend to the business in general.’
The Reuters IFRS team, after categorising the impact of individual standards as either high, low or medium, identified the other parts of the business where training would be required by looking at the standards that would make the biggest impression.
As Reuters will mainly be affected by the standards for embedded derivatives and research and development, the company’s sourcing and procurement departments, as well as its R&D staff, have received extensive IFRS guidance. The investor-relations group has also been thoroughly briefed.
Perhaps even more demanding than preparing staff for IFRS was preparing investors. Much of the hype around the introduction of IFRS has centred on how markets would react to large swings in reported figures. This is why Reuters decided to provide a full, detailed restatement of its 2004 results in March this year.
‘The main reason we followed this route was that there was so much change. We wanted to provide as much background as possible,’ Sloyan says. ‘There have been some significant market shifts because of misunderstanding IFRS. These problems were quickly corrected, but we wanted our shareholders to be fully briefed and avoid a similar situation.’
Sloyan says that the 2004 restatement was a ‘milestone’, but warns that the work on the transition is far from over. ‘We must continue work on reporting internally and externally under IFRS. We have to implement what we know and what we’ve done for our interim reporting and, ultimately, our 2005 annual report.’
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