Most CFOs favor approval of IFRS
Posted by AccountingWEB in CFO on 10/06/2009 - 22:33
A new Deloitte survey indicated that 70 percent of CFOs and other finance professionals would support the Securities and Exchange Commission's (SEC) approval of its proposed roadmap for adopting International Financial Reporting Standards (IFRS). Almost 20 percent of more than 150 finance professionals Deloitte surveyed indicated that they want the roadmap approved "as is." Another 51 percent said they think the SEC should approve the proposed roadmap, but consider pushing back the mandatory deadline a year.
These survey responses come on the heels of recent public statements by the SEC's new chief accountant and by leaders at the just-concluded Group of Twenty (G-20) Meeting on the importance of having a single set of global accounting standards.
"Clearly, these announcements have energized discussion on the future of IFRS in the U.S.," said D.J. Gannon, partner, Deloitte & Touche LLP and national leader of Deloitte's IFRS Center of Excellence. "The movement towards a single set of global accounting standards is on the mind of U.S. company executives, who must increasingly evaluate and assess their organization's preparedness for IFRS adoption."
The survey also indicated that a significant number of companies (45 percent) put their IFRS assessment plans on hold due to the ongoing delays with the IFRS roadmap. Twenty percent of respondents also indicated that the economy also factored into companies' inactivity, with 20 percent responding that their IFRS efforts were on hold due to economic challenges or a lack of internal support and resources. However, 26 percent noted they did not delay plans and, in fact, were on track with IFRS planning efforts.
Convergence has been a main driver in IFRS activity and increased pressure is expected, in general, with the latest call from the G-20 for international accounting bodies to redouble their efforts to achieve a single set of global accounting standards by June 2011.
Despite regulatory uncertainty regarding IFRS in the U.S., many companies remain focused on key IFRS trends and their own IFRS planning activities. Deloitte found many companies are taking a broader approach to assessing the impact of IFRS, and are looking at not just technical accounting differences, but also tax, technology/systems and organizational implications. The survey results suggest that finance executives are being more thorough in their evaluation of how IFRS will affect the broader organization as well.
Respondents indicated that their assessments included the following:
· accounting (78 percent)
· tax (66 percent)
· technology/systems (63 percent)
· statutory (46 percent)
· organizational (52 percent)
"While convergence has brought U.S. and global reporting standards closer, these efforts alone will not get us to a single set of global accounting standards," notes Gannon. "Some believe that the financial crisis may have highlighted that we need a single global standard in order to avoid accounting arbitrage, and create a level playing field for companies globally. That will only come with regulatory action mandating the use of IFRS."
About the Survey
Deloitte surveyed more than 150 CFOs and finance professionals from various industries and sizes in September 2009 to gather data and information on the latest IFRS trends, views, and assessment activities.
A summary of the survey results is available at. The information obtained during the survey was taken "as is" and was not validated or confirmed by Deloitte.
- 2415 reads
- login or register to post comments
- Send to a friend
- Add to a social bookmarking site
Tags:
70% of CFOs support adopting IFRS?
Of course 70% of CFOs support adoption of IFRS. It gets rid of GAAP forever after. IFRS is less than an inch thick when printed out on paper. Numerous areas of accounting, where GAAP has specific rules to follow, are subject to "judgment" of the auditor under IFRS - especially when it comes to "fair value." We all know what this means. It is not the "judgment" of the auditor that will be used to make final determinations. It is the judgment of the CFOs themselves that is utilized. The judgment of the auditor is constantly subject to the implicit, but not subtle, threat by the CFO to go "auditor shopping" when the auditor disagrees with the CFO.
Even where the CFO can get no auditor to subscribe to his judgment - as was the case in the fall of 2008 with respect to banks' requirments to write-down their "bad" assets with respect to the mark-to-market rules - it is a simple matter for the politicians in control of the Eurozone to force the IASB to change their rules over-night, without any due process of rule-making needed, or even considered to be "necessary" by the IASB and those Eurozone politicians. On an over-night basis the politicians said to the entire international banking community: "there, there now, everything is all better - you are now all permitted to sweep your write-downs under the rug." Problem solved!
I can't wait to see the head-spinning of the good folks who work at the FASB when this convergence program is complete. Suddenly, all of the rules they worked so hard to promulgate through the years will be reduced to a small, booklet of "guidelines" less than an inch thick. And, adding insult to injury, the FASB will no longer be the organization responsible for promulgating the rules. Instead, they'll be demoted to the position of a "stakeholder," and just one of several stakeholders, with no more influence on the process (within the IASB) than the Secretary of the Treasury of, say, Belgium.
Good luck with that.