Observers and practitioners in the financial and audit industries have been discussing the transition from the U.S. Generally Acceptable Accounting Principles to the International Financial Reporting Standards for nearly two years now. As the work progresses, though, smaller segments of the industry are coming to grips with what the change might mean for them.
Orange County Business Journal reports:
"IFRS goes beyond accounting," said Alfred Popken, a principal in Deloitte & Touche LLP's global IFRS and offerings services group. "IFRS will have a ripple effect throughout the organization including accounting systems, the internal control environment and training of personnel."
Some companies may be eager to convert, especially those with international businesses that want better communications with foreign customers and investors. But other companies have groaned at the potential costs of making a change, especially smaller companies with fewer international sales.
The story says teaching employees the differences between IFRS and GAAP will be the biggest cost, and that it will take more time to do so than many realize. However, the payoff will be worth it, according to experts quoted here. Companies that are using multiple standards now will have an easier time once they have moved to a single standard, and IFRS will enable improved global communication -- which only makes sense in the current global economy.