Convergence on International Reporting Standards Moves Closer
The results of a new research study out this week reveal that an overwhelming majority of countries - 90% - have plans to converge with International Financial Reporting Standards, but many obstacles still lay ahead. The study, "GAAP Convergence 2002," was developed jointly by the six largest global accounting firms: BDO, Deloitte Touche Tohmatsu, Ernst & Young, Grant Thornton, KPMG and PricewaterhouseCoopers.
"The fact that a vast majority of countries have an active agenda for IFRS convergence is very encouraging, but there is still much work to be done. Despite greater moves towards convergence, our survey indicates that obstacles still remain to achieving full and consistent adoption of the standards in the near future," said Axel Thesberg, Vice-Chairman, Professional Standards and Risk Management for KPMG Canada.
Some of these obstacles include:
- the complex nature of some of the international standards - in particular, those relating to financial instruments, and others incorporating fair value accounting - remains a barrier
- the continued need for national language translations of the international standards that are delivered timely and accurately
- the lack of training to implement international financial reporting standards
"The accounting profession has actively promoted the development of global standards, but must increase its efforts to achieve the goal," Thesberg said. "Greater commitment is now required to make IFRS available throughout the world, in the required national languages, through training, and by assisting those countries that have started the convergence process to complete it."
"We urge all capital markets participants - governments, regulators, national standards setters, as well as companies, their investors and the academic world - to continue to work together with the IASB and the accounting profession to eliminate differences between national and international standards and to each take actions in their field of responsibility to further convergence. Only with a joint effort will we achieve a common accounting framework that is interpreted and applied consistently."