The U.S. accounting profession recognizes a need to acquire knowledge of international accounting standards even as the Securities and Exchange Commission revisits plans for adoption, according to a recent survey conducted by the American Institute of Certified Public Accountants.
Asked to rate the level of familiarity with International Financial Reporting Standards (IFRS) they think they need, 36 percent of CPAs surveyed said they want advanced or expert knowledge, meaning they would become very familiar with the specific principles of IFRS. That is a six-percentage-point increase in demand for advanced IFRS knowledge over six months ago.
Twenty-four percent see a need for some knowledge, or familiarity with specifics, and 21 percent require basic knowledge, or familiarity with high-level concepts.
"CPAs are still evaluating their business and client needs as they assess what international accounting standards are and whether and when the U.S. will move to a uniform international standard," said Arleen Thomas, AICPA senior vice president for member competency and development. "Our readiness survey shows it is still early in what is likely to be a long-term process of IFRS adoption in the U.S."
CPAs gained greater basic familiarity with IFRS over the past six months according to the survey. Only 22 percent said they had "no knowledge" of IFRS, an 8 percentage-point drop from 30 percent who said they had no knowledge in September. Forty-three percent said they already have basic knowledge and 24 percent have some knowledge of IFRS.
SEC Chairwoman Mary Schapiro indicated during her Senate confirmation hearing that she intended to revisit the SEC's consideration of the IFRS adoption roadmap proposed by her predecessor. Asked whether they think the timeline should be changed, 47 percent of CPA respondents said it should be delayed. Twenty-two percent said the proposed timeline is a good one. Six percent said it should be accelerated.
A 73 percent majority of CPAs working in companies don't know what the transition costs will be. The SEC estimated the cost would be 0.125 percent of revenue for U.S. issuers. Thirteen percent of respondents think that estimate is too low while 8 percent said it was too high. The benefits of switching to IFRS remain lightly defined for most U.S. CPAs. Twenty-five percent of those surveyed foresee improved comparability of companies within industries as the most significant benefit. Simplified financial accounting and reporting was cited by 11 percent and improved financial reporting and transparency, 9 percent. Forty-four percent don't yet perceive benefits.
Familiarity with IFRS and recognition of a need to learn advanced principles of international accounting was higher among those CPAs working for foreign-owned companies with 65 percent saying they need advanced or expert knowledge and 28 percent already possessing it. Within this group, 37 percent said their organizations are ready to adopt IFRS now and 13 percent said they are actively preparing to adopt IFRS.
International Financial Reporting Standards (IFRS) are set by the International Accounting Standards Board (IASB) in London, the international equivalent of the U.S.'s Financial Accounting Standards Board (FASB) in Norwalk, CN. More information on IFRS is available on the AICPA's Web site.
The AICPA IFRS Readiness Tracking Survey was conducted via an online questionnaire from March 3 to March 17 and included 917 CPAs in public accounting firms and in business and industry. The survey's margin of error was plus-or-minus 3 percentage points. Tabulated survey results are available on the AICPA Online Media Center.