Trouble: it’s been a long time coming

Link: Why is the City in a panic over IFRS?

Indeed they are little changed. In May, almost half of our 100-strong IFRS focus group – which includes accountants from companies in the FTSE100, FTSE250 and beyond – told us their readiness for IFRS was very poor. In July, just half our group said their senior management was ready. And by this week almost half of the senior financial staff we spoke to said they had yet to start preparing their businesses for the new rules.

Given that the new rules bite in less than two months, that’s staggeringly – frighteningly – low. So perhaps the FSA had little choice other than to act. And perhaps AIM, though acting with a different motive, was right last monnth to give the 900 or so companies listed on its market until 2007 to adhere to the new standards.

But, all in all, it feels like too little, too late – both from the regulators and the regulated. Yes, there have been problems. The row over IAS39 and its unsatisfactory resolution has simmered. And the leasing industry has been unimpressed with IAS17.

All this and the acid test is yet to come. How will the markets react once companies start reporting under the new standards in 2005 and 2006?

Next week’s Accountancy Age Awards will show just how far accountancy has come in recovering from the spate of scandals that have so harmed its reputation. The uncertainty surrounding IFRS shows how far we still have to go.

Related reading