IFRS to cause more restatements
The ICAEW has warned that the number of companies restating their accounts will increase following the introduction of international financial reporting standards across Europe next year.
Andrew Ratcliffe, chairman of the institute’s audit and assurance faculty, also said it was inevitable that more companies will delay their 2005 financial statements due to lagging behind in their preparation for IFRS.
‘Auditors have a critical role to play in helping their clients get up to speed with new requirements under International Financial Reporting Standards,’ said Ratcliffe. ‘As the deadline draws near for their introduction, recent ICAEW research suggests some companies are struggling.’
‘There will be a major change in the format of the accounts; different accounting policies need to be formulated, and there are more extensive disclosure requirements,’ he added. ‘To achieve all this entails a significant project for companies that will affect their entire reporting process and may result in changes in their accounting systems. Being ready only at five minutes to midnight will not be good enough.’