It has become rather popular to survey U.S. financial executives and ask them what they think about IFRS-related issues. But I always try to get as close as possible to the raw survey data in order to look for a "key" question, i.e., one related to the respondents' familiarily with IFRS. And from my perspective, I generally don't put much stock in the opinions of people who admittedly don't know what they're talking about.
For example, Grant Thornton LLP recently conducted a national survey of chief financial officers and senior comptrollers in which one of the survey items asked "Do you have experience preparing financial statements according to IFRS?" Only 22% of the survey respondents answered "Yes," highlighting once again the overwhelming lack of IFRS experience among senior financial executives in the United States. As I have blogged before, the inclusion of such a question in surveys like Grant Thorton's is critical to putting many of the other survey results in perspective. To their credit, GT's press release announcing the survey results reads "Majority of CFOs do not agree with SEC on IFRS – More than three-fourths have no experience in preparing IFRS statements" [available here]. However, such headlines have a way of drifting into misleading territory when picked up in the media, e.g., "Most CFOs disagree with SEC on IFRS", which fails to adequately convey the critical finding that most CFOs simply don't know enough about IFRS to have a valid opinion on such matters.
There have also been a few media reports of another recent survey conducted by Deloitte & Touche that asked U.S. CFOs and other senior financial professionals various IFRS-related questions. The reported results were rather interesting, but I haven't been able to find any details about the survey or its results at Deloitte's website, so I'm reluctant to discuss them here, and frankly puzzled as to how and why the media coverage came about without the online availability of supporting data.
The Challenge of Change
I write this blog primarily for financial statement preparers, but a recent high-level discussion about the impact of Convergence on financial statement auditors provides some insight into how various participants in the financial reporting supply chain view the challenge of educating, training, and developing U.S. accounting and finance professionals as U.S. GAAP and IFRSs converge.
On October 18, 2007, the Standing Advisory Group (SAG) of the U.S. Public Company Accounting Oversight Board (PCAOB) met in Washington, DC, to discuss, among other things, "Audit Implications of IFRS Financial Statements in U.S. SEC Filings." See the meeting page for links to audio recordings of the meeting and a Briefing Paper for the IFRS discussion. There's also a detailed summary of the meeting at FEI's Financial Reporting Blog.
To date, most discussions about Convergence education, training, and development (such as those held during the recent PCAOB SAG meeting) have focused on how to get accounting and finance students and professionals who are familiar with current U.S. GAAP to learn current IFRSs. But such discussions ignore a bigger issue: Because U.S. GAAP and IFRSs as we now know them will undergo rapid, profound change as they converge into a single set of global standards, accounting and finance students and professionals throughout the world will need to absorb many significant changes that will be made to existing standards, which will be a far bigger challenge than simply learning the current differences between U.S. GAAP and IFRSs. And the bigger challenge would essentially be doubled if companies are given the choice of preparing financial statements under either U.S. GAAP or IFRSs prior to Convergence.
Here are some quotes from the PCAOB SAG meeting that I found particularly relevant to the issue of educating, training, and developing U.S. accounting and finance professionals:
In particular, I concur with Sam Ranzilla's characterization of the challenge as being much more about change management than about the technical differences between the two sets of standards. In my opinion, this is indeed a major issue that financial executives will need to contend with in the coming years: "How should we prepare for a future that will be very different from the present, not because we'll be adopting existing IFRSs but because the FASB and IASB are working aggressively to change both U.S. GAAP and IFRSs significantly in a short period of time in order to converge the standards with each other?"