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IFRS – Convergence or Adoption?

09/15/10 10:12 AM


“We asked candidates for our Top 100 Most Influential People in Accounting the following question:

‘What do you think of the current attempts to create a single set of global accounting standards (whether through convergence or the adoption of world-wide)? Should they be pursued differently — or at all?’

Their responses reflected a wide range of opinion, and represent the opinions on nearly every side of the debate. All the candidate responses are presented below.

The time for a uniform set of global accounting standards is upon us. We work in a global economy, so agreement on an international standard is paramount. Full convergence on rules will take time — especially as the economic factors continue to shift (like regulating derivatives), but there needs to be general agreement on the guiding principles in the meantime.

– Mark Albrecht, CEO, XCM Solutions

Convergence of accounting standards toward a common set of high-quality accounting principles is in the public’s best interest and would provide a more uniform language for financial reporting. Crowe supports the Financial Accounting Standards Board’s and International Accounting Standards Board’s joint efforts to improve GAAP and achieve convergence. The rapid pace of change and proliferation of complex standards may create challenges for some stakeholders, including some in the financial statement preparer community. Adequate time to react to changes and new standards, and an intensive effort to inform all stakeholders of these changes, will need to be provided, especially with a view toward global implementation. Local variations in application of common concepts that reflect economic and environmental differences may also be expected.

I personally believe that achieving a single set of high-quality global accounting standards is a very important goal. However, I also believe that we are a fair distance away from achieving that objective. Some of the momentum around IFRS has downplayed a few real challenges associated with uniform adoption of IFRS. Unfortunately, many countries have adopted IFRS with exceptions — not fully adopting the standard IFRS model. This trend illustrates the much more active involvement of European governments in accounting standard-setting, compared to in the U.S., making it a troublesome aspect of global IFRS adoption today. I also believe that many have underestimated the degree to which the “concepts-based” IFRS standards will migrate toward the “rules-based” structure that exists in GAAP today. In fact, the SEC issued comment letters that speak to uncertainties of this transition. We have “rules-based” standards in the U.S. today largely because of our financial reporting environment, and a change to IFRS will not necessarily change that dynamic.

– Charles Allen, CEO, Crowe Horwath LLP

The concept of a single set of global accounting standards, considering our global economy and the prevalence of cross-border transactions, makes great sense. However, the burden and cost of implementation during the current economy is a large hurdle for some companies. In the long term, I believe a single set of global accounting standards will be very positive.

– Jordan Amin, Chair, National CPA Financial Literacy Commission, AICPA

The concept is good. But there are a couple real-world issues to resolve. The first is that many countries that have already adopted, or are expected to soon adopt, International Financial Reporting Standards have “country modifications” — if this is prevalent, we do not really have common standards. A second issue is that standards must be relevant and useable — currently, there is a legitimate question as to whether one set of standards can meet all needs of public companies, private companies, etc. and that must be resolved.

– Rick Anderson, Chairman and CEO, Moss Adams

The proposed convergence between U.S. GAAP and IFRS is one of the most critical and controversial issues to affect accounting in the United States.

More than 100 countries currently use IFRS, a number that is set to rise to around 150 countries over the next five years. As multinational businesses continue to grow and expand, a thorough knowledge of IFRS is now essential for internationally active, growing businesses.

Convergence efforts have been in place for nearly six years. After the initial SEC “roadmap” was issued by then-SEC Chairman Christopher Cox, the administration changed and Mary Schapiro stepped in as chairwoman. Shortly thereafter, the global economic and credit crisis hit, consuming the SEC’s time and focus. In addition, as U.S. FASB and the continue to work towards convergence, some plead, “Let’s just let this process work,” which causes the progression to slow even more.

But the movement has been gaining steam with a new ruling from the SEC, recent actions on the part of the AICPA and growing support from companies that do business abroad.

There seems to be worldwide consensus surrounding the need for one global set of high-quality accounting standards and that IFRS is currently best positioned to fulfill that need. However, there is much to be gained from U.S. GAAP and, as such, the convergence of U.S. GAAP and IFRS may very well best serve the needs of the global community.

For companies that do business overseas, or those with global aspirations, the use of converged IFRS represents an opportunity to speak the same financial language as their global counterparts. It will represent a substantial opportunity to seamlessly use and provide financial information around the world. For acquisition of capital, it makes it easier for everyone involved without having to use two sets of languages.

– C.E. Andrews, President, RSM McGladrey

There is no doubt that global markets need a single set of global standards. Without one, investors will be unable to fully assess investment options that are now globally available. Having such a standard would also increase the accessibility of cross-border capital. For multinational firms, they would have one set of financials for reporting purposes that would be acceptable around the world.

These points have come more to the forefront during the recent economic meltdown. We have indeed reached the point where global businesses, financial and capital markets are interrelated. Without a single set of standards, we will become like the Biblical Tower of Babel.

– August Aquila, President and CEO, Aquila Global Advisors

As part of the natural progression of economic globalization, it stands to reason that agreed-upon global standards are in order. So, yes, they should be pursued, agreed upon, and established. This would dramatically decrease all kinds of risks, from legal contingencies to fraud, and make international business more efficient. Right now, it’s as if we have national railroads with different-gauge tracks in each country. At best, it’s terribly inefficient; at worst, it simply doesn’t work. I acknowledge that the IFRS are controversial: As proposed, they are more principle-driven than our rule-driven U.S. GAAP accounting, and thus more open to interpretation. But I think that interpretation and flexibility are necessary. The differences in the cultures and business practices of each nation have to be considered and that requires flexibility. I think that convergence will likely be the best vehicle for migration and eventual international adoption because it will allow the standards to evolve as they are practiced.

– Andy Armanino, CEO and managing partner, Armanino McKenna

The creation of a single set of high-quality standards will benefit U.S. financial markets and public companies. At CPA2Biz we are committed to helping provide the accounting profession with information and tools related to this convergence through our site, IFRS.com

– Erik Asgeirsson, CEO, CPA2Biz

The process is too much and too fast, especially considering the state of our economy, legal system vs. global, and the need to assure the U.S. public of due process and independence in accounting standards promulgation. The process of accounting standards convergence must slow down and acquire the broad support of the U.S. public, financial statement users, preparers, practitioners and regulators.

– Billy Atkinson, Chairman, NASBA

I think that the political, cultural and governance challenges associated with getting global adoption of a uniform set of high-quality accounting and financial reporting standards accomplished are far more difficult to deal with than the technical accounting issues, and will likely prevent the achievement of that goal. Still the convergence goal should be pursued to the extent feasible, and any remaining differences should be identified so that financial statement users can better consider the impact of such differences.

– Robert Attmore, Chairman, GASB

Accounting standards need to be relevant to industry and financial statement users, not developed in a theoretical world by people who don’t have to pay a price for their errors. Economists don’t like monopolies. There should be different standards competing and the stock markets should decide which standards their listing companies adopt. This would inject a pricing mechanism to test the real efficaciousness of various standards. Let the free market decide which standards to adopt. As with the 50 states, these would be laboratories of innovation, with price being the relevant indicator of which set of standards were most useful and relevant, reflected in a lower cost of capital. The idea that there should be a single, top-down, imposed set of standards (whether GAAP or IFRS) is an anachronism in a dynamic knowledge economy.

It would also be superior to have CPA audit opinions read like movie reviews, allowing auditors to communicate judgments about where they are not entirely comfortable and where they are.

Comparability is overrated, and it’s not going to happen anyway. This idea would be far superior to the status quo. All financial statements are lagging indicators anyway — similar to timing your cookies with your smoke alarm. We have to compare any change to GAAP to the status quo, not some perfect Utopia that’s never going to exist here on earth.

– Ron Baker, Founder, VeraSage Institute

I see an analogy in the drive for a single set of accounting standards to our work to achieve CPA mobility. Mobility is necessary to help create a seamless U.S. profession, something that the vast majority of states now recognize. Likewise, the move to create one set of global standards recognizes that we are operating in a borderless, i.e., seamless, business environment.

– Sheri Bango, Vice president of practice mobility and state regulatory & legislative affairs, AICPA

A single set of standards is imperative given global markets today, and IFRS is a reasonable path. With the impact of globalization and large developing economies such as China, Brazil and India, effective, meaningful comparisons between entities are absolutely critical. The U.S. accounting profession, guided by the efforts of the AICPA and the IFAC Planning and Finance Committee, continues to be very active in setting those standards, and in helping with implementation. A major concern is that international standards are impacting private companies as well as public companies as the standards are mandated and, as a result, the impact will not escape even the smallest accounting firm, yet the appropriate training in small firms may not be in place. The AICPA and IFAC are aware of this issue, and are stepping up to it.

– Jon Baron, President – Americas, Workflow & Service Solutions, Thomson Reuters Tax & Accounting

I support the goal of establishing a single set of high-quality international accounting standards to enhance the comparability of financial information and the efficiency and effectiveness of capital formation and allocation, if that is in fact what IFRS are and that is what they do.

If the SEC moves forward with IFRS adoption prior to convergence, what is most important is ensuring that the standards are of a high quality. U.S. GAAP was the gold standard for so many countries for so long because it was considered the highest-quality set of accounting standards anywhere. U.S. GAAP may not be flawless, but the words “prepared in accordance with U.S. GAAP” send a message to the financial statement user that the methods under which the financials were prepared have been tested and are trusted. U.S. regulators must demand that “prepared in accordance with IFRS” — or “U.S. IFRS” if it comes to that — guarantees the same level of trust and reliability.

Which raises another issue: How will the comparability of financial information across countries be improved upon if each country develops its own version of IFRS? The comparability of financial statements prepared in conformity with IFRS may be overstated. The roadmap as currently proposed does not enhance the comparability of financial information that would be achieved through convergence.

– Joanne Barry, Executive director, NYSSCPA

While the objective of global accounting standards seems obvious and noble, there exists far too much deep and long-lasting disagreement in many basic accounting theories to make this practical and useful. For instance, “fair value accounting” has serious regulatory and financial consequences to a company and its nation, and its application may have serious unintended economic consequences. However, I am afraid that the genie is out of the bottle and continued enormous effort will still be devoted to its ultimate realization. Nevertheless, adoption of those standards will be difficult.

– Tony Batman, Chair, CEO and president, 1st Global

Though the transition will be, and is, troublesome and costly, a single set of global accounting standards is necessary, particularly as the world is moving closer and closer to a global economy. This is clearly evident in the current recession we are experiencing in the U.S. because the entire world has been affected. Whether it will be the convergence of accounting standards or adoption of IFRS, one or the other must ultimately happen and if not now, sometime down the road.

– Parnell Black, CEO, NACVA

Please note that the opinions expressed here are purely my own, and not those of the SEC, the commissioners or the staff …

While I don’t think a single standard is a prerequisite for growth and prosperity, it could facilitate markets and the deployment of capital in ways that would support growth and prosperity. That is, as long as standards are not sought as end in itself — which it sometimes feels like — but because they would improve transparency through better disclosure and data availability, investor insight into company performance, and management accountability to markets.

– David M. Blaszkowsky, Director, Office of Interactive Disclosure, SEC

Globalization is a reality, but a single set of global standards will take significant effort and time because of politics and world economic conditions. We should continue to pursue, but not lose focus on, the importance of public versus private company GAAP. IFRS requires leadership, relationships and creativity in order to succeed.

– L. Gary Boomer, CEO, Boomer Consulting Inc.

I believe that a single set of standards for publicly held companies and companies worldwide is long overdue. For many years now we have been a global economy. Technology has been the single biggest contributing factor to this phenomenon. Technology has allowed companies to reach further to sell products and services than ever before. Having said that, most closely held companies have no reason to adhere to these same complicated standards. I am a huge believer that there should be a “scaled down” version of IFRS for companies that don’t fall into the “public” or “international” mold. I believe these alternative standards should still fall under IFRS, but kick in based upon revenue size or marketplace.

– James C. Bourke, Partner, WithumSmith+Brown

They should definitely be pursued with full vigor. A single set of high-quality accounting standards would provide the comparability that cross-border companies and cross-border investors and global capital markets need in today’s globalized environment.

The accounting standard-setting process must be robust, transparent and independent, free from political interference and underpinned by appropriate due process that gives all stakeholders an opportunity to provide input.

It’s important that accounting standards are not politicized but focused on providing relevant, timely and transparent information for investors and other users.

Jurisdictional variations undermine the ultimate goal of a single set of high-quality accounting standards. Regulators and standard-setters should resist modifying IFRS. They must get comfortable with the IASB’s standard-setting process and work through those channels.

– Beth Brooke, Global vice chair, Ernst & Young

The marketplace has spoken. As the remaining economic powers and U.S. trade partners (China, Japan, Canada, Brazil and Mexico) complete their road maps to adoption, U.S. accountants will be forced to have expertise in IFRS (for thousands of U.S. subsidiaries of foreign-owned companies), no matter what the SEC does. The SEC needs to recognize that IFRS is the quality global standard and that trying to maintain a separate U.S. GAAP will not serve investors or other public stakeholders.

– Robert Bunting, President, IFAC

The economy is definitely global in nature, and as such, it is imperative to have global accounting standards. One of the primary roles of the accounting profession is to attest to fairly presented financial statements. I believe that once a universally acceptable IFRS evolves, it will be easier for accountants to fulfill this obligation.

That being said, I am pleased that the AICPA is taking a very active role in IFRS. U.S. GAAP is understood in our financial community, and I do not want to see our financial reporting standards compromised by adopting IFRS. I would not have any issues with U.S. business preparing GAAP and IFRS financials.

At this stage, once the IFRS are adopted, I believe the value generated will exceed the cost of compliance. We will be operating for a consistent framework for evaluating the health and performance of a business.

– Peyton Burch, Director of partner programs, Deltek

Grant Thornton has been, and continues to be, staunch supporters of the ongoing movement toward one set of high-quality, globally accepted accounting standards. As CPAs, we view financial reporting as a unique language used to communicate the economic results of a company’s activities and fiscal health. At present, that language features several different dialects, depending on where a company operates. As businesses continue to expand their international footprint, it is increasingly sub-optimal to be using different reporting standards, a situation which sometimes increases costs, while decreasing comparability. Just as international business has benefited over the last 30-odd years from the increased shared use of English, so too will global companies reap the benefits of one financial reporting language.

The stakes are high. Whether the U.S. races or crawls toward IFRS could mean the difference between staying in front or falling behind. The rest of the world is moving forward, boldly. Major economies like Japan, China and India have already chosen IFRS. It is unrealistic — and risky — to think that we can stand outside looking in forever. If we don’t want our influence and opportunities stripped away, we must make sure that we keep a seat at the table.

Thus, in brief, the primary reason for moving toward IFRS is competitiveness. I think it will become increasingly difficult for the U.S. capital markets and U.S. organizations to compete in a world in which potentially we’re the only country operating under a different set of accounting standards — and therefore a different financial language. My concern is that if we do not now accelerate our move toward adoption, we will increasingly be less influential in the development of IFRS. Even post-adoption, IFRS must never truly be final (i.e., change is a given in the economic environment and thus agility is essential in standard-setting). They will also never be perfect when eventually adopted. There remain myriad unresolved issues related to the standard-setting process, the governance and funding of the standard-setting process, as well as serious and valid concerns about government intervention in IFRS standard-setting.

There are also emerging concerns about different countries that have already adopted IFRS in slightly different, country-specific ways. These counterproductive possibilities must be dealt with if we are to meet the ultimate objective – global consistency, clarity and transparency.

As I summarized above, our position at Grant Thornton, as the U.S. member firm of a global organization, is that we need to pursue resolution more aggressively; i.e., within a time frame founded on a “date certain.” I think if there is a stake in the sand, the U.S. would be compelled to take a more focused approach to overcoming some of these challenges and difficulties.

We are equally concerned about another related, but complicating and counterproductive, shift — convergence. Convergence is not a path to a single set of high-quality global standards. IFRS is a set of accounting standards that have already been adopted by a number of countries around the world. Convergence is the effort to take U.S. standards and make them compatible with international standards.

In theory, this approach represents a perfect solution. Theoretically, you could converge U.S. standards with international standards, but it’s already clear that we won’t necessarily end up with U.S. standards mirroring IFRS. Early evidence reveals that we are moving toward U.S. standards that are relatively compatible, but remain nuanced variations on the theme. Today in the United States, we require businesses to adopt a number of new U.S. standards based on the convergence process. Those who are adopting these somewhere-in-between standards are likely to have to switch horses once again to comply with yet another set of standards when they adopt IFRS. The situation is really starting to frustrate businesses and investors, and it will certainly greater vitality in the global capital markets.

Finally, at Grant Thornton, we support the SEC’s perspective that there is more work to do and thus, the process requires more time. However, we also believe that by agreeing on a date certain, we could facilitate the process and make the ultimate agreed-upon standards more effective.

– Stephen M. Chipman, CEO, Grant Thornton

Given the continuing evolution toward a world economy, globally recognized accounting standards are becoming more and more essential moving forward. In my opinion, this is an important development and rapid adoption is as important as ever.

– David M. Cieslak, Principal, Arxis Technology Inc.

The shift to a global economy calls for the development of standards that make financial statements comparable across borders. The organizations involved in the process, such as the SEC, will need to take steps to ensure that companies and accounting professionals are provided with the tools to make the proper adjustments accordingly.

– Scott Cook, Founder, Intuit

I think the goal of a single set of high-quality, fully vetted, global standards for publicly held companies is appropriate and should be pursued. However, the effort to over sell IFRS under the guise that, “Every country except the U.S. is doing it” is missing the mark and hurting the attainment of an appropriate goal of one set of standards.

The misinformation and outright hype and exaggeration of the acceptance worldwide of IFRS is not helping to convert federal and state regulators. It seems to me that before the “big sell” was made on IFRS in the U.S., much elementary work was and is required: Who is covered? What are the standards and what about the carve-outs? Why is IFRS superior to GAAP? Which entities should use IFRS? How should IFRS be developed, promulgated and monitored (there are grave sovereignty issues related to a foreign standard-setter)?

I think the best thing about IFRS at this point is that the conversation has focused the profession and the regulators on the need for global quality standards. And while IFRS may not be the best answer, there is a response to the need that will come forth if appropriate deliberation and vetting among all vested parties is accomplished.

– David Costello, President and CEO, NASBA

A single set of standards will be crucial to world commerce as our globe morphs into one overarching super-economy. I believe it’s our leadership responsibility as accounting professionals to drive the effort. I’m disappointed the SEC is distracted and not setting a steady pace. However, I believe the AICPA, FASB, the IASB and our universities are doing a commendable job. The initiative has huge implications on not only the technical side, but the market dynamics of our profession. The initiative will create significant demand for our services, and cause further specialization of our profession.

– Gale Crosley, President, Crosley+Co.

I think a single set of global accounting standards would be very good because it would bring uniformity to an already-confusing set of standards. Most companies that rely on CPA services cannot discern the differences between U.S. GAAP and global standards. A CPA promoting his or her services can more easily communicate the one set of standards to clients and prospects, especially if the client does business internationally.

I think is also incumbent on everyone who works in the accounting profession to take an active role in helping clients and the public understand the single set of standards, instead of relying on larger entities to solely communicate the information. Of course, the regulatory organizations will have to help the accounting professional understand “what” to communicate, but I think everyone should participate in this discussion.

– Scott H. Cytron, President, Cytron & Co.

I agree that there should be a single set of global standards. I am really not in a position to determine the best manner of accomplishing this goal.

– E. Martin Davidoff, Founder and firm manager, E. Martin Davidoff & Associates CPAs

I don’t think this is a big issue for the “mom and pop” or “main street” accounting firm. These standards may well be appropriate for major players but I don’t see the average small practitioner having strong feelings about this.

– Frank Degen, Government relations chair, NAEA

As the activities and interests of investors, lenders and companies have become increasingly global, it is crucial for the continued health of our global capital markets that a globally accepted, high-quality financial reporting framework is developed at both a domestic and international level. This is the only way to achieve fair, liquid and efficient capital markets worldwide by providing investors with information that is comparable, transparent and reliable. Given the unique concerns of the U.S. markets and standard-setters, convergence is the most likely method by which the implementation of a single set of global accounting standards is likely to occur.

– Bob Dias, Vice president of marketing, CCH

I think that this is an important goal, as it creates a level playing field across continents and markets, which becomes more important as investors and their advisors look at investing and diversification with a more global view. Knowing that financial information is standardized makes it easier for investors to make more informed decisions.

– Michael Di Girolamo, Managing director, Investment Advisors Division, Raymond James Financial Services

I support the creation of a single set of global accounting standards — and truly believe IFRS is way overdue. A single set of standards will not only simplify the way companies conduct themselves, but encourage 100 percent adoption of ethical behavior. In addition, any time somewhat-disparate regulatory bodies can come together for a common cause — even though the rules may be somewhat complicated to follow in the short term — the public will appreciate the effort because it builds long-term trust and a much stronger economy.

– Anton Donde, CEO, SpeedTax

A standardized set of global accounting standards is inevitable. I believe that eventually, through convergence, it will happen. It is just a matter of time. The broader concern is the potential variances based on size and type of business involved. With this consideration, I believe that there will be a difference in the development and implementation of global standards.

– Loretta Doon, CEO, CalCPA,

I think the adoption of unified global accounting and financial reporting standards are enormously important. The world is globalizing — both firms and their clients need to be able to do business around the world — and with the and globalization, the barrier to doing business internationally is going to keep getting lower and lower. More than 100 countries already use IFRS — firms of all sizes will increasingly have clients that are doing business both inside and outside of the United States and having unified standards will help everyone.

What is equally important is that the standards that we end up with are company-size-appropriate. Public company standards must be different from private company standards. We must be careful to balance the need for private company stakeholders to get consistent, relevant, transparent and meaningful information while at the same time not introducing an undue compliance burden for smaller businesses.

– Daniel Druker, Senior vice president, Intacct Corp.

KPMG continues to support the adoption of a single set of high-quality global accounting standards.

To achieve the objective of a single set of global accounting standards will likely require an independent and well-funded standard-setting body that, while suitably accountable to the world’s capital markets, is insulated from political interference and has an investor focus to its standard-setting activities.

In terms of convergence with international standards here in the United States — we recognize that by bringing U.S. GAAP and IFRS closer together, convergence will make a U.S. transition to IFRS adoption easier.

Therefore, we support the IASB’s and FASB’s commitment to redouble their effort to complete the major convergence projects in 2011, and thereby provide a sound basis for a decision by the SEC about whether, when and how to incorporate IFRS into the U.S. financial reporting environment.

In addition, we believe that financial markets regulators in jurisdictions with significant capital markets, such as the U.S. SEC, the Commission of the European Union and the Japanese FSA, among others, can play an important role in the convergence of national and international accounting standards by overseeing standard-setting activities globally.

KPMG International member firms have assisted more than 1,400 clients around the world in their IFRS conversions. Our experience has taught us that it is important for preparers and auditors to discuss the application of standards across borders and seek common solutions to application issues, as doing so can lead to increased comparability in financial reporting from one capital market to another.

There’s no doubt that this is challenging — both within a global network like KPMG’s and more broadly across the profession — but it’s clearly the path we need to pursue to facilitate more efficient allocation of capital resources around the globe.

– Timothy Flynn, Global chairman, KPMG

IFRS has become the international accounting standard, with more than 100 countries having already adopted or in the process of adopting it. That total includes all of the world’s most developed economies with the exception of the United States.

Accordingly, I welcomed the SEC’s announcement in February reiterating its support for a single set of high-quality global accounting standards, and its support of IFRS as that single set of standards. I am on the record in support of U.S. adoption of IFRS, as there are many benefits to American investors and the markets. Such benefits include facilitating more efficient capital allocations by both companies and investors, promoting increased transparency of financial information given the principles-based nature of IFRS, reduced costs for companies (especially those operating in multiple jurisdictions), as well as protecting the long-term capital market competitiveness of U.S. capital markets.

The Center for Audit Quality is committed to working with the SEC as it carries out its work plan, as well as collaborating with other stakeholders to encourage engagement. As such, we are continuing our efforts to educate capital market stakeholders, including investors, to understand the benefits of IFRS.

– Cynthia Fornelli, Executive director, Center for Audit Quality

Arriving at a single set of accounting standards is imperative; inconsistency breeds uncertainty, which in turn discourages investment and business activity.

The most obvious approach is to adopt IFRS — after all, it’s just U.S. GAAP against the rest of the world, at the moment. We would then work within the IFRS structure to get change. While IFRS is not perfect, it’s better than the current uncertain standoff.

– Christian Frederiksen, Chairman, The 2020 Group

As capital markets become increasingly global, U.S. investors have a corresponding increase in international investment opportunities. In this environment, I believe U.S. investors would benefit from an enhanced ability to compare financial information of U.S. companies with that of non-U.S. companies. The Securities and Exchange Commission has long expressed its support for a single set of high-quality global accounting standards as an important means of enhancing this comparability. Therefore, International Financial Reporting Standards will potentially provide the best common platform on which companies can report and investors can compare financial information.

– J. Russell George, Treasury Inspector General for Tax Administration

The ultimate goal of having a single global standard for preparation and presentation of financial statements is certainly a net positive, but I have some concerns about the transition:

– Trickling change may require that accounting departments are dealing with some major change in the accounting rules constantly over the next several years (e.g., ratification of EITF 08-01 in fall of 2009 followed by new joint FASB/IASB exposure draft on revenue recognition in summer of 2010).

– We may see a temporary divergence of practice as each company and each major accounting firm adopts and applies each change in the absence of a volume of authoritative literature. This will create an uncertain environment both for preparers and consumers of financial statements.

– Ron Gill, CFO, NetSuite Inc.

The idea of a single set of global accounting standards is nice, especially as business today isn’t and shouldn’t be limited by geographic boundaries. And more principles-based than rules-based is probably good. But standards imposed by regulatory authorities for comparability aren’t all that helpful to stakeholders as would be, say, reporting that meets the true needs of these stakeholders: assurance of accuracy and relevance specific to the purpose. With something as complex as accounting, judgments are almost always necessary and exceptions seem to be the rule (captured minimally, at present, in footnotes). An approach that clarifies the judgments applied and assures transparency of the judgment process is, in my humble opinion, the more important objective. Does IFRS accomplish this any better than GAAP does?

– Michelle Golden, Founder, Golden Practices

The ability to compare corporate finances on a consistent basis using the IFRS standards makes sense, particularly for companies with global operations. IFRS will drive consistent standards of measurement across national borders.

But IFRS is principles-based compared to the rules-based approach of GAAP. For U.S.-based companies, the experiences of Enron, WorldCom and others raise serious questions about the wisdom of leaving the audit process to the discretion and interpretation of the auditors, as IFRS would do, rather than more tightly dictating audit procedures, as GAAP currently does. Certainly the SEC and the investing community will have difficulty switching from GAAP, even as the need for more disclosure and tighter scrutiny increases.

For these reasons, I believe that the best approach should be through a convergence of the two systems.

– Jeff Gramlich, President, CCH Small Firm Services

The biggest advantage will be consistent reporting worldwide. The biggest disadvantage will be the additional cost of change in accounting to one standard reporting system and the impact on income for the period of change.

– Larry Gray, Government liaison, NATP

There is a natural challenge in bringing so many economies (with varying levels of sophistication) together. However, globalization is no longer just a catchphrase, it is the norm. With companies routinely having operations in multiple countries, it is even challenging to define what is a “foreign” or “domestic” organization. For the users of information, despite the great challenge to those preparers, it is key that financial data be as consistent as possible. I think it is a bit early to determine whether the current initiatives are on track, but I do strongly believe they must continue to be pursued.

– Calvin Harris, National president and CEO, NABA

It is the right approach, as we live in a global and very connected, interdependent world. The approach should add the words “high-quality” to the single set of accounting standards. The private company standards (IFRS for SMEs) are being adopted in other countries with changes that almost nullify the advantages of converging. The worst thing that could happen is adopting the single set and adding “dialects” all over the world, making it even more confusing than it already is.

The current convergence project of the FASB-IASB has me very concerned because of the extremely short timeframe and magnitude of the changes being dealt with. This needs to be reconsidered in a way that can allow proper input from stakeholders and an implementation timeline that gives everyone time to get the necessary training and systems changes that will be needed to deal with the significant changes being proposed.

– Tom Hood, CEO and executive director, MACPA

I think that the Memorandom of Understanding is working. It appears to me as if FASB as well as the IASB are sincerely trying to achieve convergence under its precepts. At the same time, as their work progresses, significant and, in some cases, possibly irreconcilable differences, are being unearthed. Lease accounting might be an example. Thus, the schedule for convergence is sliding.

Again, I would like to support the concept of moving towards principles-based as opposed to rules-based accounting. However, I am somewhat cynical about human nature and its ability to rationalize. If an accountant is not principled, then principles-based accounting will not function. Also, I feel that the litigious nature of the U.S. culture has created a need for rules-based accounting, which should be easier to defend.

Ultimately, I want convergence to continue. It will facilitate international trade and investment. However, I do not feel that IFRS should be adopted in toto if it means that the U.S. will no longer have many of the rules that it has developed and that have been tested over time.

– Andrew L. Hult, President, NCCPAP

I believe that it’s more pressing that we devote our limited time and resources toward supporting the recovery of our economy.

– Trey James, CEO and co-founder, Xcentric

A single set of global accounting standards is an eventuality, whether through convergence or IFRS. As the world becomes even more connected, one set of standards is a requirement in order for investors to have consistent information. Given the complexity of transactions and the interconnection of economies and investments, one set of global standards is essential. It is no longer a question of if, but when. Unfortunately, the when becomes the bigger question. Since there are numerous organizations, individuals, governments, etc. that have a stake in what the ultimate global standards will look like, we will continue to see much dialogue and debate around this topic for some time before we get to the final state.

– Gregory Johnson, Executive director and COO, NABA

IFRS will be disruptive in the short term, and will cause more work for auditors and accountants as they try to understand the differences. Many products already support IFRS, and will help with the transition. IFRS looks at many items differently, not necessarily correctly or incorrectly. Having a single global standard should make globalization from the U.S. into other geographies easier. IFRS is not as big of a threat to the U.S. from other countries nor as big of a threat as some in the accounting profession believe it is.

– Randy Johnston, Executive vice president and partner, K2 Enterprises

I’m generally supportive of the creation of global accounting standards, although there are critical transitional and educational needs that flow from potential changes. From a tax perspective, the tax policy ramifications of the major issues presented by the replacement of GAAP by IFRS must be analyzed. Examples of issues include:

– E&P rules, use of U.S. GAAP

– Transfer pricing

– Inventory issues, especially impacts on LIFO and lower of cost or market

– Revenue recognition

– Change of accounting methods

– FIN 48

– IRS educational and training needs

– Edward S. Karl, Vice president of taxation, AICPA

I believe that practitioners, from all size firms, should be more open and proactive relating to IFRS. The smaller firms (most of the AICPA membership) often don’t see that it could possibly relate to them and their clients. I am hopeful that continual progress will be made.

– Rita A. Keller, President, Keller Advisors

I think there needs to be a single set of global accounting standards. They only question remaining is when. My guess is we’ll see adoption of IFRS worldwide in the next three to five years. More importantly, I believe this could be the next “Sarbanes-Oxley,” in terms of creating additional revenue for the accounting profession and resurgence similar to what we experienced during the pre-recession boom.

– Allan Koltin, President & CEO, PDI Global Inc.

It’s imperative that we have one set of global accounting standards to facilitate investment and capital flow on a worldwide basis. Personally, I support the adoption of unified international financial reporting standards.

– Kenneth Koskay, Senior vice president and general manager of certification, Tax & Accounting business of Thomson Reuters

Creating a single set of standards and the implementation of IFRS aren’t a pursuit created by any one body as much as the necessity of the business world pushing to a global environment. I remember practicing in Buffalo just seven years ago and hearing of small-business clients selling to foreign entities. The need for a single set of accounting standards was real then and will continue as businesses continue to buy/sell their operations globally, expand operations globally, buy products globally and sell their products globally. Without one set of standards, how do you possibly compare the financial viability of a company in China to Canada to the U.S.?

The SEC needs to set a date for the U.S. convergence to IFRS for the benefit of the U.S. publicly traded companies to be viable globally, which will push the private sector down a similar path.

– Mark J. Koziel, Director, specialized communities, firm practice management, AICPA

The creation of a single set of globally accepted, high-quality accounting standards is in the best interest of the capital markets in the United States and the rest of the world. However, this “single set” of standards needs to be responsive to the needs of entities and the users of their financial statements. For this reason, we believe that the IFRS framework, which includes a full set of standards for entities with public accountability and Small and Medium-Sized Entities, provides the best option for capital markets in the U.S. and our clients.

The decision to make a wholesale change in accounting standards from U.S. GAAP to IFRS is understandably complex and can be emotional. While a potential change to IFRS through a process of convergence with U.S. GAAP may not be the most efficient path, it is important to the process in the United States because a decision to adopt the IFRS framework would likely not be possible without it. In addition, the convergence process will also lead to the creation of several improved accounting standards that would not have been developed as quickly, if at all, without the convergence process. These improved standards will be a benefit to both entities and financial statement users in the future

– Gordon Krater, Managing partner, Plante & Moran

I think the last two years have taught all of us the importance of transparency when it comes to business. The language of business is accounting and as such, one standard would go a long way to creating more transparency among multinationals, investors and individuals. Whether we like it or not, the world economy is consolidating. The increasing role of Europe, China and India will force that convergence. Having one standard for accounting will help accelerate that and will protect all of our interests.

– Rene Lacerte, Founder and CEO, Bill.com

For the benefit of investors, who invest worldwide, it is critical that U.S. accounting standards be harmonized with IFRS. The current approach, overseen by the SEC, seems to be the most efficient and effective process, although not without its problems.

– Charles E. Landes, Vice president, Professional Assurance Standards and Services Group, AICPA

Not being a CPA, my technical knowledge on this subject is limited. From a layman’s philosophical view, I think the idea of consistent global accounting standards is a worthy and perhaps necessary goal in an economy that is unquestionably global in its nature. The ability for capital to flow freely throughout the world is an important requisite to sustain global growth. It is vital for investors to have confidence in financial information to stimulate that capital flow. Whether this goal can be reached from a practical standpoint without causing severe disruption to financial markets is a concern that I suspect can be addressed but may impact the timing of the effort. Given the current tenuous state of many markets around the world, this may not be the most opportune time to implement this initiative.

– Mont Levy, CEO and principal, BAM Advisor Services

A global set of standards is great for multinational companies and public companies. There should be a different set of standards for private U.S. companies

– Taylor Macdonald, Vice president, Intacct

I believe the global nature of the worlds’ economies in 2010 makes a compelling case for the benefits of IFRS. Capital markets are intrinsically linked through not only public traded companies, but sovereign activities. As the world embraces like-standards, the capital markets will become increasingly transparent and beneficial to the investor community.

– Teresa Mackintosh, General manager and senior vice president, Workflow & Service Solutions, Americas – Professional, Tax & Accounting business of Thomson Reuters

The AICPA may be based in the United States, but our vision encompasses the entire world. Many of our members contend with international business issues. As their organization, we have to respond to their needs and guide them.

The institute supports one set of global accounting and has for years. We certainly believe it will happen and are taking the appropriate steps to ensure that our country’s CPAs are appropriately prepared. Through our educational and communications efforts and research, such as www.ifrs.com and IFRS readiness surveys, we are setting the stage in the profession for the inevitable adoption of international standards.

– Janice M. Maiman, Vice president of communications and media channels, AICPA

I prefer evolution over revolution. I see the advantages of one set of globally accepted accounting standards, but I would like to make sure that it doesn’t put the U.S. at a competitive disadvantage. If in our best interests and where possible, we should continue with the efforts to converge standards — where not, let’s hold our ground.

– Eric Majchrzak, Marketing and communications director, Freed Maxick & Battaglia

As our capital markets are increasingly global, it’s important we ultimately have a single set of high-quality global accounting for public companies and companies with cross-border reporting. I support the path FASB and the IASB are taking to that goal, through convergence to eliminate the differences between U.S. GAAP and IFRS.

– Krista M. McMasters, CEO, Clifton Gunderson

The importance of global accounting standards cannot be overestimated. As the nature of how we do business has evolved, so must our methods of financial reporting. Commerce no longer knows borders. International clientele transcends the largest accounting firms, and many smaller firms have a presence on the international business landscape. More than 100 countries either already use or allow the use of IFRS, and this number will grow in the years ahead.

The AICPA has been a proponent of one set of accounting standards for years and is working diligently to bring the U.S. accounting profession up to speed on IFRS. We work closely with the SEC and have advocated for a date certain to begin implementing IFRS. Through our Financial Reporting Executive Committee, formerly the Accounting Standards Executive Committee, the AICPA provides thought leadership to the International Accounting Standards Board. An example of our commitment to IFRS is that we will soon introduce it in the Uniform CPA Exam.

While the AICPA supports IFRS, we also support a separate set of accounting standards for private companies that are relevant for users of private standards.

– Barry Melancon, President and CEO, AICPA

For public companies – yes. It’s clear from the recent recession that we are dependent on each other globally. They are also needed for a global generation of new investment capital.

– James C. Metzler, Vice president of small firm interests, AICPA

Global accounting standards will benefit both companies and investors, and should be pursued. They will make it easier to compete and invest in an increasingly global economy.

Convergence of GAAP and IFRS is the preferred approach over simple IFRS adoption. Retaining some aspects of GAAP in the global standards will help preserve the quality and relevant detail of financial reporting in the U.S. It also will help minimize the costs to companies making the transition.

– D. Scott Moore, President, Association for Accounting Marketing

I believe that the goal to create a single set of global accounting standards is an important one. It makes more sense in my mind to adopt a single standard (i.e., IFRS) as opposed to converging two separate sets of rules because the convergence exercise appears to be a case of trying to fit a square peg into a round hole. One only need to look at the debate over fair value to see that the IASB and FASB have very different ideas of what such a standard should be. If IFRS was the standard, differences could be reconciled by the body that set those standards and a final proposal could be issued, input could be solicited and a final standard could be put forth.

To answer the question, “Should they be pursued differently?” — it appears, from a practical standpoint, that the ship has already sailed. The SEC has decided to wait until more information can be compiled with regard to what impact there would be in the U.S. market. Meanwhile FASB and the IASB have engaged in an ambitious campaign to converge — or at least attempt to converge — their standards.

Since some people involved (e.g., Sir David Tweedie, Michel Barnier) insist that the United States’ involvement is paramount, the process could have been simpler if the SEC determined how it felt about IFRS and how it would affect the U.S., then communicated its approval or concerns. Since the SEC has the final say as to what accounting standards must be followed in order to have access to capital in the U.S. markets, everything that happens up until that point hangs in the balance of the commission’s final decision.

– Caleb Newquist, Founding editor, Going Concern

It is my opinion that a single set of global standards is critical to practitioners in the next millennium. As we all know, the world keeps “growing” smaller and this is an initiative critical to my clients as they think globally. Yes, I am a strong proponent.

– Jay N. Nisberg, President, Jay Nisberg & Associates

Getting to a single set of global accounting standards is going to be net plus in an era of globalization. But on the other hand, it places a huge amount of pressure on finance departments — many of whom are still wrestling with other pressing financial reporting demands, such as some of biggest revenue recognition changes in years — with the advent of EITF 08-01 and EITF 09-03 passed by FASB just last fall. Some businesses we speak to are still struggling to comply with Sarbanes-Oxley, because of limitations in their business processes and software systems. What’s clear to us is that businesses, especially global ones, that have a mishmash of Stone Age systems, multiple instances, and manual integrations are going to have a very painful time meeting these new standards — and are going to be at a disadvantage. The big advantage for our customers is that because they’re running on NetSuite’s financials, whether it’s a single entity or a multi-sub, we can roll out upgrades to support the latest financial standards to them automatically, just as we did with supporting EITF 08-01 and 09-03 — and let them focus on running their businesses instead.

– Zach Nelson, President and CEO, NetSuite

A single set of global accounting standards is a very good idea for global businesses. The ability for financial statement users and stakeholders to have a common approach allows them to compare the relative performance of global companies and to use a common framework for global capital market financing arrangements. The benefits for smaller businesses are less clear. Because many SMBs don’t operate globally and many are not publicly traded, we don’t see an immediate benefit for them transitioning from GAAP to IFRS.

As with any topic as complex as global accounting rules, there is no single answer “that fits all” businesses; this means there will be some businesses that may elect to use the less complex IFRS method than the GAAP method of accounting. For example, a newly formed business might consider using IFRS, rather than GAAP, especially if international business transactions are possibilities for the future. Also, because the credit market in the U.S. is a significant source for capital, it will also be necessary for investors/creditors to become familiar with non-GAAP methods.

GAAP in the United States is “rules-based,” while the IFRS approach is “principles-based;” these approaches are steeped in history, and adopting any change will be a transformational set of events for global businesses.

It’s our belief that a worldwide adoption of IFRS is preferred with the caveat that country uniqueness be preserved. Some countries, such as the U.K., have adapted IFRS to address unique issues of that country. We believe a similar approach will occur in the U.S., as the SEC is definitely focused on transitioning to global accounting convergence, an approach we think will be beneficial for U.S.-based companies. Likewise, we see the benefit of the flexibility provided for U.S.-based SMBs, which is that an SMB may elect to use either GAAP or IFRS.

– Jodi Uecker-Rust, President, Sage Business Solutions

The world continues to shrink as businesses of all types pursue opportunities in international markets. For businesses seeking diverse sources of capital to expand, the nuances of the U.S. financial reporting environment can slow this process. Because it provides a high-quality, principles-based platform while retaining transparency, reducing complexity and encouraging use of professional judgment, much of the world uses IFRS as a commonly accepted standard.

I believe that American adoption of IFRS is not a question of “if” but “when.” According to sources at the AICPA and at some of the nation’s largest public accounting firms, IFRS could replace GAAP in five years in the U.S. The Securities and Exchange Commission took the first step in advocating adoption by issuing a concept released in August 2007, “On Allowing U.S. Issuers to Prepare Financial Statements in Accordance with IFRS.” Nine months later, then SEC Chairman Christopher Cox reiterated his support of the SEC’s IFRS position in his speech to the International Organization of Securities Commissioners.

Is the accounting profession ready? It is certainly going to be a challenge to move from the current rules-based system to a more principles-based system of accounting. It will require a change in culture, and many are also concerned about how it will affect the profession from a liability standpoint. However, the industry can quickly acclimate itself to the new standards through commitment to the process and education on the standards and practice application. This industry’s intelligent professionals can readily transform themselves when they see the need and make the commitment to change. I have no doubt that the industry will embrace the new standards, and can be instrumental in helping clients make the transition. Just as consulting and financial planning services grew from traditional accounting practices by identifying a client need and providing solutions to satisfy the need, those who are best able to acclimate will reposition themselves as adding value to the relationship and will be rewarded for their efforts. Those who are unable to make the transition will be left behind. Change represents opportunity for those who are willing to make it.

– Roger Carlton Ochs, President, H.D. Vest Inc.

I think U.S. GAAP will get close but not identical to IFRS — both boards have been working diligently to close the gap. In this global economy there is a need for a common accounting language. However, there are many business cultural differences among the countries of the world and I don’t think there will be many countries who will adopt IFRS intact. The question becomes what will the SEC decide for U.S. public companies and will they cede standard-setting to London?

– Judith O’Dell, Chair, FASB Private Companies Financial Reporting Committee

This is realistically a matter of “when” as opposed to a matter of “if.” The question is who will be the driving force in setting the global standards. Up until recently, I think most people assumed that the U.S. would take the lead here, but given the current economic climate and the fact that other countries are openly challenging U.S. dominance, this is now less certain.

– Jeffrey S. Pawlow, CEO and managing shareholder, The Growth Partnership

As more and more businesses expand beyond their traditional borders, the need for a common set of global accounting standards has become increasingly apparent. The inefficiencies inherent in keeping abreast of multiple standards and regulations, maintaining multiple sets of accounts and reconciling those accounts monthly, quarterly and annually for reporting purposes puts a tremendous burden on businesses, especially in these times of increased transparency.

At the same time, we must be cognizant of the cost and complexity of such sweeping changes. The current approach, where the opinions of accounting professionals most directly affected by such a change is considered, should be key to a methodical and deliberate implementation of new global standards.

– Brian Peccarelli, President, Workflow & Service Solutions, Tax & Accounting, The Tax & Accounting business of Thomson Reuters

A common set of standards that can be used globally is a goal to which our organization is committed and continues to work toward. The U.S. financial reporting system/constituents need to collectively determine the best path forward to ensure the protection of U.S. investors and the transparency of U.S. capital markets.

– Teresa S. Polley, President, Financial Accounting Foundation

Business is becoming global and global differences in standards can make it difficult to compete and operate. The move to a single set of standards only makes sense as global borders become less meaningful.

– J. Clarke Price, President and CEO, Ohio Society of CPAs

Globalization is the major issue in determining the future of financial reporting. As the financial markets become more and more global, the need for a global set of accounting standards to make possible global transactions and reporting has really become a necessity. In addition, investors want an environment where they can evaluate and compare firms across national boundaries. The International Accounting Standards Board is marching to pull together one set of global standards and the U.S. Financial Accounting Standards Board is agreeing to converge U.S. standards with international standards. The rollout of the standards will take years, and the adoption even longer, but globalization will have been the major force in determining the outcome. The current economic crisis has uncovered the interdependent character of global business, and financial and capital markets, making the need for global accounting standards more evident.

– Robert Reid, CEO, Intacct

As a leader in the accounting profession, I believe the current attempts have been met with the best intentions, but due to the complexity of the core issues, it can appear to be confusing and cause concern with many constituencies. I believe the proposed changes should continue to be pursued and I hope that the key groups and leaders from the profession can have more opportunities for dialogue. The profession is quite diverse and practitioners from small business to large organizations need to understand how a dramatic change in standards will affect them. It is a great time for leaders to come together and focus on communication and consensus building that parallels technical discussions.

– Sandra B. Richtermeyer, Global chair, Institute of Management Accountants

This is obviously a highly debated issue, and it will continue to be long after any convergence or conversion actually happens. There are big differences between U.S. GAAP and those standards set by the IASB, and the transition will likely be very complex and very challenging for many. However, at the end of the day we need to realize that our transition to a global economy is not going to stop, and the accounting world needs to adapt as this happens. If we can pull this off successfully, we will have taken a big leap forward toward the development of more consistent financial statements that can better support global investment, decision-making and operations without the need for the complex translations and analysis we’re faced with today.

– Kevin Robert, CEO, Wolters Kluwer Tax & Accounting

As a CPA, philosophically I believe there should be a single and consistently applied set of global accounting standards. The U.S. adoption of the IFRS is inevitable and a timetable should be established. Convergence of GAAP standards to IFRS standards will not result in a uniform methodology. Procrastination through convergence of methodologies will prove to be more costly.

– Michael Rosedale, President and founder, CPADirectory.com

I have long been a proponent of the free market system on a worldwide basis. For this to function optimally, all countries need to follow the same standards. So I strongly support convergence of IFRS worldwide.

– Marc Rosenberg, President, The Rosenberg Associates

With the world operating on a global basis, the adoption of IFRS is important. However, we cannot have two sets of standards; one for global and another for companies not operating globally.

– Frank K. Ross, Director, Center for Accounting Education, Howard University

As the economy becomes global, standards must align.

– Rebecca Ryan, Founder, Next Generation Consulting

While IFRS was developed as an effort to provide a financial reporting standard for less-developed countries that lacked standards of their own, there has been a general recognition that the world economy would be well served by having one universal financial reporting standard that applied everywhere. Many of our developed trading partners have already moved toward adopting IFRS, so a move in that direction seems inevitable. The SEC has in fact endorsed such a move. An issue is that IFRS is not as sophisticated a standard as U.S. GAAP and there are a number of differences in approach. Convergence seems, therefore, to be the logical approach so that, when the U.S. does adopt IFRS, it might be different from GAAP, but it will, in most ways, be as robust as GAAP in terms of protecting the interests of the users of financial statements.

– Mike Sabbatis, President and CEO, CCH, a Wolters Kluwer business, North America

In today’s global economy, it only makes sense to implement global accounting standards. However, I believe there should be two sets of standards, one for public companies and one for privately held companies. Privately held companies should not be held to the same standards as are public companies.

– Frank Schettino, Managing partner, Anchin, Block & Anchin

I believe the current attempts to create a single standard (the adoption of IFRS) are positive because the world does need a single standard in order to foster more competition, although I am aware that initially costs increase as a result of the transition to one standard. So, I agree with the pursuit of a single standard. The only change I would suggest is that the process be expedited in order to get to the single standard more quickly.

– Mark Schlageter, President, Business Compliance & Knowledge Solutions, the Tax & Accounting business of Thomson Reuters

With the SEC’s approval a few months ago of a new timeline for possible adoption of IFRS, it appears that IFRS is back on track for future adoption at some point in the foreseeable future. The SEC set 2015 as the earliest possible date for adoption. While a move to IFRS will initially affect only public companies, over time these standards would become fairly widespread. All CPAs will need to stay tuned on this subject, not just those who audit public companies. Educators and students will also be affected, as the CPA Exam is moving to begin testing on IFRS in 2011. Our education system will need to adapt to IFRS.

Moving to IFRS is just part of the overall trend toward a global economy driven primarily by significant changes in technology, capitalism and world trade. Having a set of accounting standards that is uniform and used across the globe certainly fits with the world in which we now live. Thomas Friedman’s book, “The World is Flat,” covers this trend rather well. The recent banking/financial crisis also demonstrates how our economic and financial systems are intertwined around the globe.

I am sure not everyone will be supportive or happy about this development. Some in the profession have real and legitimate concerns about the quality of IFRS and how they compare to GAAP. There are also issues related to the funding and independence of the IASB, the cost to businesses to implement this change, how “principles-based” standards like IFRS will fare in the U.S. legal system when CPAs are sued, and giving up U.S. regulatory control/oversight to an international board. The SEC is looking at all those issues, so I don’t think they will move to adoption unless they are satisfied those concerns can be overcome or mitigated. But when all is said and done, it appears that a move to IFRS is inevitable. Eventually, the arguments against it will fall under the weight of the logic behind it. Thomas Friedman noted in his book: “The historical debate is over. The answer is free market capitalism.” I think it is just a matter of time that the debate over IFRS will also be settled, and I think the answer is — we are going global.

– John M. Sharbaugh, CEO and executive director, Texas Society of CPAs

I absolutely believe that creating a global set of accounting standards should be pursued, and, in fact, has to be pursued. The recent financial crisis is a good example of how financially intertwined the world is, and the danger of having various reporting standards adding to confusion during troubled times.

Our firm is a Chicago-based CPA firm operating entirely in the Midwest. Yet we are doing quite a lot of consulting internationally (we have both clients based in other countries and clients based in the U.S. with foreign operations). We see the confusion caused by different reporting standards. I have been personally involved in consulting for a U.K.-based company (reporting under IFRS) who owns a U.S.-based subsidiary (reporting under U.S. GAAP). No being well-versed in IFRS, I found it very difficult to even understand the U.K. audited financial statements.

It appears that many if not most industrialized nations other than the U.S. have already have adopted IFRS (EU, Japan, India, etc) and many believe that IFRS is the most viable solution. I personally would prefer to see a convergence of U.S. GAAP and IFRS but I am probably prejudiced towards GAAP.

Having said all that, I do believe this will be a very difficult task and will not happen any time soon. Determining exactly which body or bodies should be responsible for determining accounting standards, transitioning from GAAP to IFRS in the U.S. and other non-IFRS countries, etc., is an almost insurmountable task. But as the world shrinks, it absolutely must happen.

– James Sikich, CEO and managing partner, Sikich LLP

I think mass standardization efforts are well-intentioned, but misguided. The efforts lead us in opposite directions. First, they require lowest common denominator thinking, while at the same time they lead to mass complication of even the simplest concepts.

– Douglas Sleeter, Founder and president, The Sleeter Group

As we move to a global economy, we are in support of standards that make financial statements comparable across borders. It is important to note that there are differences in accounting standards for truly small businesses versus large businesses. We urge the standards-making boards to take this into consideration. In my opinion, the SEC, the AICPA, CPA societies, and other organizations will certainly have to take a well-thought-out approach to help companies and the accounting profession get up to speed.

– Brad Smith, President and CEO, Intuit

I think, in the long run, it’s needed. But I do feel that going from a rules-based approach to a principles-based approach is the wrong path.

– Jeffrey D. Solomon, Chairman, Massachusetts Society of CPAs

The SEC, from the perspective of global competition for capital, ultimately needs to make sure that our markets are on a level playing field with others around the world. That means we will probably need to adopt IFRS for public companies in the U.S. Investors making a decision about whether to invest in companies listed on U.S. exchanges or those abroad need to be able to compare apples and oranges. However, the needs of users of financial statements of our thousands of private companies are in many cases different. Many of these entities are not competing for international capital and domestic users are accustomed to U.S. standards. The blue-ribbon panel studying this issue will consider those needs and recommend the appropriate solution.

– Neal D. Spencer, CEO, BKD

Global accounting standards are being used throughout the world. More than 100 countries either allow or mandate the use of International Financial Reporting Standards. The European Union adopted IFRS for public companies in 2005. Canada, India and Korea are adopting IFRS for public companies in 2011, and more are already scheduled in the years to come. Global standard are present and are here to stay.

The AICPA has supported the concept of global standards for many years. We have worked with our constituent members and the SEC. We have been advocates for a date certain to start the implementation process of IFRS. Education is a critical part of this process, and we have participated in this endeavor with our CPA members, universities, the investing public, and users of financial statements. IFRS will be introduced on the Uniform CPA Exam in 2011, and the education process is already in place. Alternatives for private company financial reporting standards are being examined and evaluated to best serve the needs of the public.

– Paul V. Stahlin, Chairman, AICPA

Capital markets are global, and so a single set of high-quality standards for public companies would produce many benefits. The AICPA has long advocated convergence and holds a leadership position in educating the United States about IFRS. Our Web site, www.ifrs.com, is a virtual reference book on the subject. It is key to me that CPAs in the U.S. have the opportunity for an orderly transition to IFRS. In the near term, we are introducing an IFRS certificate, which will indicate that the CPA holder has had at least 70 hours of education. The importance of understanding both U.S. GAAP and IFRS is increasing as our world becomes more global. Beginning in 2011, questions on IFRS are eligible for inclusion on the Uniform CPA Examination.

– Arleen Thomas, Senior vice president of member competency and development, AICPA

I believe the current attempts to create a single set of global accounting standards has been quite confusing to the public and to the profession. FASB’s inability to address in a timely fashion issues surrounding creation of global accounting standards has led to confusion. At the end of the day, I think crafting a single set of global accounting standards which provides flexibility for non-publicly traded companies and nonprofit organizations is needed. The IASB, FASB and the SEC need to work more collaboratively to advance this initiative, get it on track and define a date for mandatory adoption.

– Ralph Thomas, Executive director, NJSCPA

Having worked at a global telecom multinational company for more than 20 years, and now at the Institute of Management Accountants, which has members in more than 100 countries, I certainly appreciate and support the value of a globally consistent language for financial transactions, information exchange, and investor analysis. Have we addressed some tough questions head-on, though, such as – in the U.S., have we considered, seriously, the need for a “professional judgment framework,” given our litigious and unforgiving nature?

– Jeffrey C. Thomson, President and CEO, IMA

I believe that there should be a single set of high-quality accounting standards used by all public companies around the world, and that substantial efforts should be expended to ensure adoption and consistent application of such standards.

A single set of global accounting standards would facilitate efficient capital allocation decisions by simplifying comparisons among global investment opportunities. It also has the potential to result in a higher level of investor understanding and confidence, and thus a reduction in the overall cost of capital. As investors search for and find opportunities to diversify their portfolios with holdings from a range of countries, they need to have the ability to compare financial reports from various countries, and, more important, have confidence in financial reporting worldwide.

The only set of standards that could be accepted globally are the International Financial Reporting Standards issued by the IASB.

In the effort to gain universal adoption of IFRS, the convergence process alone is not sufficient. All countries, including the U.S., should ultimately commit to adopting IFRS. The financial crisis demonstrated the importance of a converged approach. If countries, including the U.S., do not make a commitment and set a date certain for adopting IFRS, we will continue to see companies play regulatory arbitrage, risking “a race to the bottom.”

This does not mean that IFRS cannot be improved. Ernst & Young comments now and will continue to comment on IFRS, just like preparers, users and policy-makers do. Accounting standards are always going through continuous improvements. That’s why a thorough due process consultation with fully engaged stakeholders is so important; it helps ensure that standards will continue to be reflect the needs of all concerned groups.

– James S. Turley, Global chairman and CEO, Ernst & Young

As the transition to IFRS is accepted by countries across the globe, it is becoming an expectation that some form of IFRS adoption or convergence is a “cost of entry” for countries that want to compete in the global market. The ongoing input and guidance from the U.S. SEC, investors, regulators, accountants and accounting organizations (such as the AICPA) as well as others, ensure that every impact of IFRS on the U.S., whether through adoption or convergence, is considered. If you spend time looking through the SEC’s Work Plan, it really does instill confidence that all the “fine print” effects are considered, which is re-assuring (and critical) from my perspective.

In regards to whether it should be pursued differently or not, I have thoughts in two areas: variance in levels of implementation and implementation timelines. IFRS at the global level presents a significant variance on how countries plan to adopt it (some countries leaning towards convergence, some towards complete adoption) and the timelines for implementation. There are a number of benefits of IFRS that will be lost if the timelines around global implementation are stretched out too far. In 2011 we can expect to see a recommendation from the SEC on whether or not to incorporate IFRS into the U.S. financial reporting system, and with 2011 right around the corner, I feel as though the U.S. is keeping pace with the rest of the globe.

Perhaps convergence is the path to full IFRS adoption? At this point, there is widespread support towards a single set of global accounting standards, but what varies widely is how people believe we should get there. This is a relatively slow-moving project and has huge, global impact, and I feel that the current way it is being pursued is acceptable: carefully weighing all impact to all stakeholders, both positive and negative, before changed is pushed down. This is one decision that needs a great deal of time and consideration, and I feel that it is being given to it at this point.

– Jennifer Warawa, Senior director of partner programs, Sage North America

As we move to a global economy, we are in support of standards that make financial statements comparable across borders. It is important to note that there are differences in accounting standards for truly small businesses versus large businesses. We urge the standards-making boards to take this into consideration. In my opinion, the SEC, the AICPA, CPA societies, and other organizations will certainly have to take a well-thought-out approach to help companies and the accounting profession get up to speed.

– Jill Ward, Senior vice president, Intuit

While national pride may be humbled in some countries, it is very desirable to have one set of financial reporting standards worldwide. Of the largest 100 economies in the world, over 50 of them are international corporations. Standardizing reporting will help investors and regulatory bodies to understand the finances much better. However, I don’t believe in having one set of IFRS, then allowing certain countries to make their own iterations.

– Troy Waugh, CEO, FiveStar3

While significant challenges remain, the potential for one single global language of accounting is a goal that we should strive for. That global language is IFRS. It is fundamentally important for the enhanced operation of capital markets in the medium to long term that we achieve this goal, which I believe will result in greater efficiency and lower costs of capital as a result of the greater transparency and comparability in the financial statements. While it inevitably results in a certain loss of sovereignty over an individual country’s accounting standard-setting, in the end the adoption of IFRS as issued by the IASB is the right approach, rather than convergence of domestic accounting standards to something similar.

The FASB/IASB convergence program has been welcome, as it will enable the two sets of accounting standards to be significantly closer by the end of 2011, the point at which the SEC is due to make a decision on the adoption of IFRS in the U.S. However, convergence is not ultimately the right answer for the U.S., as differences would inevitably remain, meaning that the goal of true comparability would be lost, as would some of the significant benefits of the single accounting language.

I am pleased with the transparency of the SEC’s workplan for adoption of IFRS and hope that it leads to adoption of IFRS in the U.S. In any event, I do not believe that a further convergence program between U.S. GAAP and IFRS is sustainable.

– Jack Weisbaum, CEO, BDO USA

Globalization is not just a buzzword; it’s the reality of the world that we live in. Global accounting standards will happen; the question now is “when” and how.” As the final touches are put on the roadmap and implementation of the rules and regulations begin, great care must be taken to protect against fraudulent financial reporting. This industry, and our individual professional careers, are built on the reputation and trusted relationships with our clients. If we don’t protect that with the new standards, the foundation of our industry will surely be rocked and could change how individuals and businesses look at us forever.

– Sandra L. Wiley, Partner, Senior consultant and COO, Boomer Consulting

The world is shrinking and the more consistently that global businesses can account for transactions and report their financial status, the better it will be for investors and other users of financial statements.

In my work and travels, I feel that most U.S. practitioners — in firms of virtually all sizes — are not actively preparing for IFRS or the convergence of standards. I am not sure if this represents a feeling that such preparation would be premature, given the two boards are still negotiating, or whether there is a lack of understanding of the impact to firms and clients of all sizes if FASB and the IASB are able to meet their June 2011 initial deadline. I believe firms who are dedicating resources to understanding the proposed changes to U.S. GAAP or have already had to navigate IFRS due to international client work, will have a competitive advantage beginning in 2011.

– Jennifer Lee Wilson, Co-founder and owner, ConvergenceCoaching

I believe that the current attempts to create a single set of accounting standards, through convergence, have the highest probability of success. Setting international standards has many questions that need to be discussed and resolved. For example, standards are different across the globe, with U.S. standards being more precise and rule-based, where as the international standards (IFRS) are more judgmental. Whose standards should predominate? And will a single set of standards work in countries with vastly different economic systems? As consensus develops around these questions, a global system will emerge, in my opinion; but it will take time, and I believe the incremental efforts as defined by convergence are the best way to achieve the goals of global accounting standards.

– Yacov Wrocherinsky, CEO, Infinity Info Systems

Global “convergence” on a single set of high-quality accounting standards is going to happen. The economic logic supporting this direction is compelling: The present accounting tower of babble makes no sense at all. However, the obstacles to convergence are many. Alas, at the top of the list is political interference by our governmental representatives, both within the U.S. and within the E.U. Over time, we will move forward. But it’s going to take time.

– Michael R. Young, Partner, Willkie Farr & Gallagher

I believe a single set of global accounting standards are essential because the profession and the clients we serve are global. Even small businesses today tap into world markets. If the public is to be protected on a global basis, there must be global accounting standards. I’m not convinced that they should be pursued differently than they are being pursued at the present.

– Donny J. Woods, President, National Society of Accountants” (Fonte: http://www.webcpa.com)

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