PracticeAuditFDs turn on international standards

FDs turn on international standards

Would a switch to international accounting standards benefit your business?

Link: IFRS welcome but not a panacea

This week’s Accountancy Age/Reed Accountancy Big Question found that 55% of FDs surveyed felt that switching to International Accounting Standards would have no benefit to their business. By comparison, just one in five believed business could benefit.

According to a European ruling, all publicly listed companies based in Europe, must comply with IAS by 2005 at the latest. Companies will have to begin compiling comparative reports under these standards from next year.

Kevin Tomlinson of auto accessories firm Signam Ltd said: ‘Whilst international standard conformity is desirable for multinationals and Plcs, lets face it, it is meaningless to the majority of the UK companies.’

It is the larger firms who are keenest on the new standards, especially those conducting business internationally.

Gary Scott of Bentley Motors said: ‘Within our business, we undertake a lot of benchmarking within our group, and also our industry sector. The standardisation we have had since switching to IAS has benefited us greatly.’

‘We trade a lot with European countries and some of their accounts are incomprehensible. It would be advantageous if all accounts were done the same way,’ added Frank Tew, FD at food and drinks ingredients specialist Gerald McDonald & Co.

A common benefit cited by those that advocate IAS is the standardisation of accounting language.

Arran Leach of Pioneer Europe said: ‘It would make life easier as there are currently differences in terminology. We are all playing to the same rule book, just different versions.’

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