Are you ready for IFRS?

There is no accounting initiative more important to a company right now than the move to International Financial Reporting Standards (IFRS). It may seem like a long way away, but please don't fall into the trap of thinking you've got plenty of time. By doing so, you are only sowing the seeds of disaster. Kenneth Marshall, of Ernst & Young's Assurance & Advisory Business Services, tells accountingweb.com the deadlines for conversion "may be as soon as 2014."  

He reckons that "a three-year comparative reporting" requirement means that U.S. companies should start adapting their many financial reporting and accounting processes within the next eighteen months. Folks, that is right around the corner. Planning cannot start soon enough when it comes to something this complex. Most experts agree that operating with an internationally accepted set of standards is a good idea. We exist in a global economy now, after all. What many people do not realize, however, is that the changes required to support the transition at many companies affect all aspects of accounting and reporting function, and then some. There also almost certainly will be additional costs. Depending on the company, they may or may not approach Sarbanes-Oxley start-up costs, which I know you would rather not relive.

In any case, there are a lot of Sarbox issues here. Controls will have to be adjusted, or at least rethought. Processes and reports will have to be fined tuned. Consultants may be required. One wild card: It's unclear how the auditors, even in a new principles-based era, are going to react. They may just take a super-conservative approach that could rekindle old Sarbox tensions. The bottom line is that you've got to get a task force together now if you haven't already done so. - Jim