Focus on SEC Action; FASB-IASB Joint Projects on Standards Published October 18, 2010
New Orleans (Oct. 18, 2010) — Certified Public Accountants see the U.S. at a pivotal time in the development of uniform, high-quality global accounting standards as the U.S. Securities and Exchange Commission evaluates a transition to International Financial Reporting Standards and the U.S. Financial Accounting Standards Board and the International Accounting Standards Board work jointly to merge U.S. and global standards.
“Our latest tracking survey shows CPAs in the U.S. are increasingly aware of International Financial Reporting Standards but significant numbers are waiting to invest more resources in international standards until they see a clear signal from the Securities and Exchange Commission about future U.S. adoption,” said Arleen Thomas, AICPA senior vice president for member competency and development. “CPAs are also watching the FASB-IASB convergence progress very closely, according to our focus groups.”
The key message from the AICPA’s October 2010 IFRS Readiness Survey is that movement within the U.S. accounting profession toward IFRS has been on hold since May 2010. Basic familiarity with IFRS has remained stable since May 2010 at 45 percent and the number of companies and firms actively preparing for adoption or ready for adoption has remained about the same at 13.5 percent. Thirty-eight percent of respondents indicated they are delaying implementation while waiting for SEC action.
The largest proportion of respondents, 40 percent, support adoption of IFRS, although only after more convergence between U.S. and global standards through the IASB-FASB convergence process. An additional 14 percent support adoption of IFRS without qualification signifying a combined 54 percent majority supports IFRS adoption.
A majority of members, 63 percent according to the survey, believe a 2015-2016 adoption target would allow enough time for implementation, if the SEC decides in 2011 to require IFRS at a future time.
The IFRS tracking survey results were announced at the AICPA’s fall meeting of its governing Council.
The AICPA survey tested members’ knowledge and views of the FASB and IASB plan to complete major convergence projects outlined in their Memorandum of Understanding and issue several new accounting standards codification updates and IFRS amendments by the end of 2011.
Members are split about pace of change for FASB-IASB convergence; 37 percent said it’s too fast, 33 percent said about right, and 25 percent were are unsure. Less than 5 percent said they think it is too slow.
The AICPA recently conducted two focus group sessions with members to assist us in preparing an Oct. 14 comment letter to the SEC on IFRS adoption. A key theme that emerged was that the success of FASB and IASB in eliminating differences between U.S. GAAP and IFRS will be a critical factor in determining the amount of time and level of challenge in converting to 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, Conn. More information on IFRS is available on the AICPA’s Web site http://www.IFRS.com.
The IFRS Readiness Survey — September 2010 was conducted among 1,620 respondents via Internet poll between Sept. 3 and Sept. 27 and has a margin of error of less than plus or minus 3 percentage points.