Thursday, September 04, 2008

More on What IFRS Means for You

So many articles on IFRS, so little time.

published this piece examining the differences between IFRS and GAAP, what's required to get up to speed on the international standards, and what the Big Four are doing to prepare their accounting staffs.
In light of legal issues, (Deloitte & Touche Senior Manager Kevin) Dueck thinks the shift to "fewer rules and more principles" will prompt accountants to hone skills in "documenting judgments and procedures clearly and concisely." He's not sure the change actually will bring more documentation but, he says, "The entry-level person will need to be a critical thinker and a good writer."

And, what about the tug-of-war between auditors and corporate management over disclosures and unqualified financial statements? "A lot of people think IFRS will give managers more power in negotiating with auditors" over rules interpretation and adverse opinions in statements," (W.P. Carey Professor of Accountancy Philip) Reckers notes.

Dueck doesn't see that hazard. "It's at the auditor's discretion which type of opinion to issue or whether to issue an opinion at all," he says. But, he adds: "What you will see is more footnote disclosures in financial statements." That means investors will work harder to understand the financial health of companies they're researching.
Standards Deviations: U.S. Financial Accounting Heads for Change [Knowledge@W.P. Carey]

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