US ‘not ready for IFRS transition’

The US is not ready for IFRS, a former chief accountant of the Securities and
Exchange Commission has said, despite the home of the world’s largest capital
markets making rapid moves towards allowing the use of the accounting rules.

Very few US investors ‘understand, let alone know IFRS’, Lynn Turner told
Accountancy Age this week. ‘As a result, their ability to analyse the
financial statements of companies preparing IFRS in a meaningful fashion will be
limited at best, especially without the reconciliation which does provide
context for such analysis,’ he said.
Turner was chief accountant at the SEC until 2001. The body is consulting on
allowing companies to file under international standards.

‘There are just about no professors teaching IFRS in this country… and almost
no professors who themselves have a working knowledge of IFRS’.

‘That in and of itself is a sad state of affairs here, but clearly highlights
the obstacles that need to be overcome if there is to be convergence on a set of
high-quality international standards,’ he said.

Robert Herz, chairman of the US standard setter, the Financial Accounting
Standards Board, this week spoke of a ‘national plan’ that would move all
companies in the US towards the use of IFRS.

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