PracticeAccounting FirmsTime to change outlook for the New Year

Time to change outlook for the New Year

Roll on 2004. After 12 months of tackling the problems caused by the corporate excesses of the previous few years, accountants everywhere will be tiring of the dead hand of regulation.

With Higgs and Smith now incorporated into the combined code, you could be forgiven if your senses had become so dulled by new forms of regulatory control, that each new measure simply washes over you.

It’s a danger best illustrated by some of the legislation that has crossed the Atlantic in recent months. What was once the Sarbanes-Oxley Act, became Sarbox, only to become Sox. As well as ever more ludicrous contractions, such familiarity is breeding resentment.

So what will the New Year bring? With chancellor Gordon Brown borrowing money faster than a student on a lengthy degree course, everyone in business will be fearing for the state of the economy. Smaller accountancy practices will have to get to grips with the new money laundering legislation that bites in March.

For tax professionals it is all change. Sir Nick Montagu is leaving his post at the head of the Inland Revenue. And once our taxmen and women return from their Christmas break, they will be working overtime to ensure a smooth transition to the Revenue’s new IT supplier, Cap Gemini Ernst & Young.

But the big change in 2004 – for everyone – is the advent of international accountancy standards. Some 7,000 listed companies across Europe will have to start preparing shadow accounts using the international financial reporting standards for year ends after January 2004, with full IFRS-compliant accounts following a year later. More than 1,700 of them are in the UK.

Don’t underestimate the scale of the change – some of the rules are similar and some are not. They will also have very different effects depending on the industry you are in. And smaller companies and their advisers cannot afford to stand aside. This is a change that will affect everyone sooner rather than later.

Once the big boys are IFRS compliant, everyone else will be expected to fall into line. In confirming last week that companies using IFRS will not have to submit a separate set of accounts, the Revenue has signalled that it is ready to engage. Expect banks and other financiers to follow suit.

If 2003 was dealing with the past, expect 2004 to be very different. It will have both eyes on the future.

Email comment@accountancyage.com.

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