Friday, September 12, 2008

IFRS coming to an audit committee near you?

On August 27 the SEC voted to publish for public comment a proposed Roadmap that could lead to the use of International Financial Reporting Standards (IFRS) by U.S. issues beginning in 2014, or earlier. The SEC proposes to make a final decision in 2011 whether adoption of the IFRS is in the public interest and would benefit investors. The possible adoption of IFRS by U.S. issuers has been seriously discussed for at least the past couple of years. Based on this latest action by the SEC, and the volume of IFRS guidance published by the large accounting/auditing firms, adoption of the use of IFRS appears likely. What might adoption mean for audit committees? Audit committee member financial literacy would suggest a future need for some additional committee member continuing education about the differences between IFRS and GAAP. Additionally, generally IFRS tends to be less rules and more principles based, requiring the company and the audit committee to exercise (and justify) greater accounting method discretion and judgment. Some current audit committee members might not be interested in making the effort to learn the important aspects of IFRS, or in having to deal with the conversion process, or in the additional effort that may be required to exercise judgment on a greater number of accounting issues.

For your information, the following is a link to an EY paper that summarizes differences between IFRS and GAAP.$file/us_gaap_v_ifrs.pdf


Alice Dickens said...


My name is Darla Sycamore and I have a blog called IFRSCanada:The devil is in the details and I call myself "The IFRS Exorcist". Although I focus on implementation in Canada(2011) I also deals with US issues and have published there.
E&Y has a webinar on Audit Committee issues tomorrow (Sep 15). Deloitte Canada runs a very interesting Directors Series. Also check out the Canadian Institute of Charteres Accountants "20 questions for Directors on..." series. There is one on IFRS.

"The IFRS Exorcist"

Alice Dickens said...

Sorry for the typos in my comment. I should have used the preview.
Alice Dickens is the name I use in another blog I have on hats.