American Institute of Certified Public Accountants and Chartered Institute of Management Accountants agree to offer new CGMA designation

New AICPA-CIMA designation -- Chartered Global Management Accountant -- to advance knowledge and practice of management accounting worldwide
LONDON / WASHINGTON, DC (May 23, 2011) – The governing bodies of the American Institute of Certified Public Accountants and the Chartered Institute of Management Accountants, headquartered in London, today agreed on creation of a new professional designation, the Chartered Global Management Accountant, that will be a worldwide standard of professional excellence in management accounting.
With approval now given by the AICPA and CIMA councils, the two accounting bodies will create the new CGMA designation to give management accountancy a higher profile in the United States and promote the professional development of management accountants across the globe. Backing the new CGMA designation will be an AICPA-CIMA joint venture with international resources and experience in management accounting, business and cultural knowledge.
CIMA president George Glass said: 'We are delighted that management accountancy is to be given a strong new global impetus by this joint venture. This advances our strategic aims and will ensure management accountants, committed to strict ethical standards, will receive world-class support in a fast-globalising world.'
'This is truly an historic moment for management accounting and the accounting profession worldwide.' AICPA chairman Paul Stahlin said. 'Our joint venture with CIMA creates long-term strategic value for our members and literally opens up the world for US CPAs in management accounting.'
CIMA is the largest professional body in the world focused exclusively on management accounting and the AICPA is the world’s largest professional accounting organisation with members in a wide range of accounting and financial executive roles. Together, the new venture will cover more than 550,000 members and students worldwide.
The new AICPA and CIMA joint venture will promote and establish the CGMA as the preeminent, globally recognised management accounting designation. The joint venture will combine the strength of the AICPA in North America with CIMA’s presence in Europe, the Middle East, Africa, Asia and elsewhere.
CIMA chief executive Charles Tilley said: 'The new CGMA will be recognised throughout the world as the gold-standard designation for management accountants who play a vital role in building sustainable business value. The joint venture will raise the profile of the profession and be a passport for careers throughout the world.'
'Economic globalisation is a reality for all businesses now and in the future and so it’s critical that we have a universally accepted standard of excellence for management accounting,' said AICPA president and CEO Barry Melancon. 'Combining that commitment to excellence with ethics and integrity, the CGMA will help produce and recognise top management accounting professionals worldwide.'
It is proposed that the new CGMA letters will be issued to members early in 2012. AICPA voting members with at least three years working in management accounting or a financial management role would qualify for an accelerated route to obtaining the new designation. Those holding the new designation will commit to a programme of developing and maintaining competency in management accounting as well as leadership and strategy.
This knowledge base will be derived from an expert-panel assessment of skills and competencies needed to succeed in various career paths in management accounting. CIMA members, all of whom hold either an ACMA or FCMA, will be entitled to use the letters ACMA CGMA or FCMA CGMA if they wish to. The new CGMA will be issued by the AICPA and CIMA through a license with the joint venture, with membership remaining with the existing organisations.
The AICPA and CIMA had announced their proposal to form a joint venture on March 28, 2011.
For press enquiries please contact:
CIMA Victor Smart Director of profile and communications +44 (0)20 8849 2254 victor.smart@cimaglobal.com
AICPA William Roberts Director media relations + 01 202 434 9266 wroberts@aicpa.org
Notes to Editors 1. The Chartered Institute of Management Accountants, founded in 1919, is the world’s leading and largest professional body of Management Accountants, with 183,000 members and students operating in 168 countries, working at the heart of business.
CIMA members and students work in industry, commerce, the public sector and not-for-profit organisations. CIMA works closely with employers and sponsors leading-edge research, constantly updating its qualification, professional experience requirements and continuing professional development to ensure it remains the employers’ choice when recruiting financially-trained business leaders.
CIMA is committed to upholding the highest ethical and professional standards of members and students, and to maintaining public confidence in management accountancy. CIMA is proud to be the first professional accounting body to offer a truly global product in the fast-moving area of Islamic Finance. According to independent research conducted by the University of Bath School of Management, CIMA’s syllabus and examination structure are the most relevant to the needs of business of all the accountancy bodies assessed. See the CIMA Difference report for further information at www.cimaglobal.com/cimadifference. For more information about CIMA, please visit http://www.cimaglobal.com/ Follow us on Twitter at www.twitter.com/CIMA_News 2.
The American Institute of Certified Public Accountants (www.aicpa.org), founded in 1887, is the world’s largest association representing the accounting profession, with nearly 370,000 members in 128 countries.
AICPA members represent many areas of practice, including business and industry, public practice, government, education, and consulting; membership is also available to accounting students and CPA candidates. The AICPA sets ethical standards for the profession and U.S. auditing standards for audits of private companies, non-profit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination. The AICPA maintains offices in New York, Washington, DC, Durham, N.C., Ewing, N.J. and Lewisville, Texas. Media representatives are invited to visit the AICPA Press Center at www.aicpa.org/press. Follow us on Twitter at www.twitter.com/AICPANews.

Masters in Accounting - Great USA site by Mark Macaluso

Masters in Accounting was created as a nonprofit resource to serve students considering enrolling in a masters in accounting program. Actively maintained, Masters in Accounting is the only nonprofit website which lists and links to every accredited masters in accounting program as well as answers some basic questions about the degree so that students have a single unbiased resource from which they can begin their research.


About Us

Who and Why?

Masters in Accounting was created by Mark Macaluso in June 2010. Mark, a MSA graduate, decided to create Masters in Accounting because despite the fact that you can find almost anything online, there were to-date no reliable nonprofit websites devoted to presenting prospective students with an understanding of what a masters in accounting program entails, which schools offer the degree, what differences exist between various masters in accounting programs and sub-specialities, etc.

Contact

Feedback is always welcomed. While I generally try not to give advice about specific schools and programs in an attempt to remain unbiased, I will be happy to answer questions relating to other aspects of the degree, career options, etc. So please don’t hesitate to email me, Mark Macaluso, at: info #at# mastersinaccounting #dot# net.

IFAC: Crisis shows need for global standards...

The financial crisis has only highlighted the need for a single set of global accounting standards, it has been claimed.

In its 2008 annual report, the International Federation of Accountants (IFAC) describes how its core work on developing international guidance and rules has become even more relevant during the global recession.

Ian Ball, chief executive officer of the IFAC, said: "As a result of the crisis, some of the ideas IFAC has been communicating for decades are resonating with greater force."

"Chief among these is the need for convergence to global standards."

The report also includes details of the actions taken by the IFAC in a range of areas, and compares the outcomes to the original goals set out by the body.

Recently, John Smith, a member of the International Accounting Standards Board, told the European Commission's Financial Reporting in a Changing World conference that the integrated nature of capital markets means a global set of accounting rules is vital to future economic stability.

To find out about achieving a balance between the needs of corporate governance and those of everyday business management, visit our Enterprise Governance page.

UK firms 'can share IFRS expertise' ...

Accounting firms in the UK could be given opportunities to share expertise with the US, according to one expert.

Mark Allison, chairman of the International Accounting Standards Board, has told Scotland on Sunday that expertise is needed to help firms in North America to switch to International Financial Reporting Standards (IFRS) as currently used in the UK.

Countries including the US, Canada and Mexico are set to transfer to IFRS from their local variations, with various deadlines set for the shift.

The moves are hoped to create an increase in consistency and transparency in international accounting.

Mr Allison said the fact that accounting firms in the UK will "share a common language and culture" with their US counterparts means that there could be opportunities to "provide expertise".

Robert Herz, chairman of the US Financial Accounting Standards Board, recently told Reuters that it could take a long time to implement IFRS in the US, claiming that it could result in more effort than is currently presumed.

Canada Confirms January 2011 as IFRS Start Date!

The Canadian Accounting Standards Board (AcSB) has re-confirmed the “go date” for IFRS Canada for “publicly accountable enterprises” . The date will be for years beginning on or after January 1, 2011 (don’t forget you will have to have an opening balance sheet and a comparative figures on an IFRS basis (2010 calendar for calendar year companies). It will be a very busy period up to the conversion date and especially busy if you have barely scratched the surface of converting to IFRS. Read more...

IFRS Implementation Around the World (2008)

The International Financial Reporting Standards (IFRS) is a single set of accounting standards developed by the IASB (International Accounting Standards Board). Public companies in at least 100 countries now prepare financial statements using IFRS. The map below shows the status of IFRS implementation around the world.

IFRS Implementation Around the World (2008)

IFRS is a less extensive body of literature than is U.S. GAAP. It does not include extensive industry-specific guidance and in many instances, IFRS contains similar concepts but does not contain the same amount of detailed implementation guidance as does U.S. GAAP.

Because of the less-detailed guidance, there are more circumstances where application of IFRS will require exercise of judgment, which will need to be supported by contemporaneous analysis. IFRS requires clear, transparent disclosures of critical accounting policies and estimates, particularly in areas requiring application of judgment.

SEC to Determine Next Steps

by Jeff Henson

Read more on Jeff's blogs:

• IFRSUSA.
• XBRLUSA.

The SEC is analyzing comments and determining its next move on IFRS. In the meantime, we would do well to stay IFRS aware and conduct a business impact assessment on how IFRS will affect our businesses. This would be a good time to determine how your financial statements will be impacted by IFRS and to learn more about the convergence project between the FASB and IASB.

The FASB & IASB have several topics on their convergence Agenda including:

• Financial Statement Presentation (Performance Reporting)
• IFRS 2 Share-based Payment Amendment – group cash-settled share-based payment transactions Impairment
• Income Taxes – Reconsideration of IAS 12
• Insurance Contracts – Phase II (Comprehensive Project)
• Joint Ventures – Reconsideration of IAS 31 Leases
• Liabilities (was part of Business Combinations – Phase II)
• Post-employment Benefits including Pensions
• Rate-regulated Activities
• Related Party Disclosures
• Revenue Recognition
• (IFRS for) Small and Medium-sized Entities (also referred to as Private Entities and Non-publicly Accountable Entities)
• Intangible Assets Extractive Activities IFRS XBRL Taxonomy
• Conceptual Framework Project Update
• Business Combinations Project Update
• Financial Statement Presentation
• Revenue Recognition Project Update

As a result of these and other initiatives, the FASB expects to make significant progress toward international convergence in the next few years. However, because of the volume of differences and the complex nature of some issues, the FASB anticipates that many differences between U.S. and international standards will persist.

IASB publishes fair value findings...

Fair value accounting guidance set out by the US Financial Accounting Standards Board (FASB) is consistent with that published by the International Accounting Standards Board (IASB). Read original article.

That is the conclusion of a review by the IASB aimed at ensuring consistency in the way such rules are applied.

Following the accelerated 30-day consultation on the issue, relevant guidance from the FASB's Staff Positions on fair value measurement will be included when the IASB publishes an exposure draft on the same subject next month.

Sir David Tweedie, IASB chairman, said: "We have heard a clear and consistent message on financial instruments accounting - fix this once, fix it comprehensively, and fix it in an urgent and responsible manner."

This is why the IASB has set out a six-month timetable for replacing current standards relating to the subject, he added.

Earlier this month, the FASB launched two draft proposals aimed at improving guidance relating to fair value measurement and impairments.

SEC IFRS Roadmap moves slowly and relentlessly forward

NEW YORK, April 27, 2009 – PricewaterhouseCoopers’ leading International Financial Reporting Standards (IFRS) experts will be discussing the most recent and important developments in the move to adopt international accounting standards in the United States in a live webcast tomorrow afternoon. The discussion will address the latest thinking on IFRS from regulators, standard setters and other constituents on the debate over when, and how, IFRS should be adopted for use by U.S. domestic registrants.

Beginning at 3:30 p.m. on Tuesday, April 28, the event will be a 75-minute live video webcast, including a Q&A session at the end. Read original article.

To register for the webcast, please go to http://www.meetpwc.com/rsvp/invitation/invitation.asp?id=/m2c53c-1RHZ5W5F6LNWI. Once you register, you will receive a confirmation email with a link and access instructions for joining the webcast.

The deadline expired Monday on the 150-day comment period for the SEC's "Road Map" to adoption of IFRS. Amid uncertainty in the U.S. and global economies, and notwithstanding concerns that have surfaced from a wide range of constituents about costs and timing, the drive toward creating a unified set of high-quality financial reporting standards continues to move forward.

According to a newly released PwC report, IFRS is already affecting U.S. companies independently of moves to eventually adopt IFRS in the United States. The impact will broaden considerably over the next few years as ongoing convergence of U.S. GAAP and IFRS brings key changes to U.S. financial reporting. Those changes will have numerous implications for U.S. businesses, most notably revenue recognition, leases, consolidations and pensions. In these areas, in particular, companies may need to rethink certain business operations, strategies and agreements as a result of convergence (ranging from sales staff compensation to compliance with certain debt covenant agreements).

Meanwhile, companies are already feeling the indirect effect of IFRS adoption by their foreign subsidiaries and counterparties, particularly in customer and vendor transactions. These two simultaneous movements—ongoing IFRS adoption around the globe and convergence in the United States—will bring near-constant change to US financial reporting for years to come.

The discussion, which will highlight PwC’s point of view, and what the Firm sees as the next steps the SEC will take in moving toward adopting IFRS in the US, will be moderated by the Firm’s US IFRS Practice Leader, John J. Barry. Also taking part will be:

• David B. Kaplan, PwC partner and leader of the International Accounting Consulting Services team;


• David Schmid, PwC partner and leader of U.S. Global Accounting and Consulting Services;


• Angie Blomberg, partner in the firm's Transaction Services practice and a leader in the firm's IFRS efforts in the financial services industry;


• Richard Fuchs, PwC partner and IFRS Steering Committee member with extensive experience in IFRS conversion during postings in Germany, London and Hong Kong.

IASB amends 12 standards

The International Accounting Standards Board (IASB) has made a range of amendments to 12 International Financial Reporting Standards (IFRSs). Read original article.

All the changes are part of the board's annual improvements project, which is used to make non-urgent adjustments to IFRSs.

The latest amendments reflect issues that were initially raised in proposals published in October 2007, August 2008 and January 2009.

• Print-friendly version of this press release [PDF]


• Annual Improvements project page


• IASB homepage

A spokesperson for the IASB said: "By presenting the amendments in a single document rather than as a series of piecemeal changes, the IASB aims to ease the burden of change for all concerned."

The changes are effective for annual periods beginning on or after January 1st 2010, unless otherwise specified, he added.

However, the IASB has decided to postpone reconsideration of two issues raised in the proposed changes of August 2008 due to comments received during the consultation period.

Recently, the board announced it is working on the proposals made by the leaders of the G20 nations at their meeting earlier this month.

To reveal, but not to regulate

IN PUBLIC, bankers have been blaming themselves for their troubles. Behind the scenes, they have been taking aim at someone else: the accounting standard-setters. Their rules, moan the banks, have forced them to report enormous losses, and it’s just not fair. These rules say they must value some assets at the price a third party would pay, not the price managers and regulators would like them to fetch. Unfortunately, banks’ lobbying now seems to be working. The details may be arcane, but the independence of standard-setters, essential to the proper functioning of capital markets, is being compromised. And, unless banks carry toxic assets at prices that attract buyers, reviving the banking system will be difficult. Read original article.

On April 2nd, after a bruising encounter with Congress, America’s Financial Accounting Standards Board (FASB) rushed through rule changes. These gave banks more freedom to use models to value illiquid assets and more flexibility in recognising losses on long-term assets in their income statements. Bob Herz, the FASB’s chairman, decried those who “impugn our motives”. Yet bank shares rose and the changes enhance what one lobbying group politely calls “the use of judgment by management”.

European ministers instantly demanded that the International Accounting Standards Board (IASB) do likewise. The IASB says it does not want to be “piecemeal”, but the pressure to fold when it completes its overhaul of rules later this year is strong. On April 1st Charlie McCreevy, a European commissioner, warned the IASB that it did “not live in a political vacuum” but “in the real world” and that Europe could yet develop different rules.

It was banks that were on the wrong planet, with accounts that vastly overvalued assets. Today they argue that market prices overstate losses, because they largely reflect the temporary illiquidity of markets, not the likely extent of bad debts. The truth will not be known for years. But banks’ shares trade below their book value, suggesting that investors are sceptical. And dead markets partly reflect the paralysis of banks which will not sell assets for fear of booking losses, yet are reluctant to buy all those supposed bargains.

To get the system working again, losses must be recognised and dealt with. Japan’s procrastination prolonged its crisis. America’s new plan to buy up toxic assets will not work unless banks mark assets to levels which buyers find attractive. Successful markets require independent and even combative standard-setters. The FASB and IASB have been exactly that, cleaning up rules on stock options and pensions, for example, against hostility from special interests. But by appeasing critics now they are inviting pressure to make more concessions.

Standard-setters should defuse the argument by making clear that their job is not to regulate banks but to force them to reveal information. The banks, their capital-adequacy regulators and politicians seem to dream of a single, grown-up version of the truth, which enhances financial stability. Investors and accountants, however, think all valuations are subjective, doubt managers’ motives and judge that market prices are the least-bad option. They are right. A bank’s solvency is a matter of judgment for its regulators and for investors, not whatever a piece of paper signed by its auditors says it is. Accounts can inform that decision, but not make it.

Banks’ regulators have to take responsibility. If they want to remove the mechanical link between drops in market prices and capital shortfalls at banks, they should take the accounts that standard-setters create for investors and adjust them when they calculate capital. They already do this to some degree. But the banks’ campaign to change the rules is making inevitable a split between two sets of accounts, one for regulators and another for investors. The FASB and IASB can help regulators to create whatever balance-sheet they want. But in doing so they must not compromise their duty to investors.

US firms see opportunities in IFRS switchover...

US companies see adopting International Financial Reporting Standards (IFRS) as a chance to make improvements to the way they operate, according to a new survey. Read original article.

A study by Accenture found that 83 per cent of executives at US companies with a listed value of $1 billion (£680 million) believe the changeover from US Generally Accepted Accounting Principles to IFRS will present them with a chance to make changes in their finance functions.

Dan London, managing director of Accenture's finance and performance management practice, said: "Those companies that view the conversion as an opportunity to upgrade their performance management capabilities, addressing compliance and risk management, as well as increasing operational efficiencies, are better positioned to drive value from the process."

However, firms should start preparing for the switchover now to make sure they are well placed to deal with any issues arising, he added.

Last year, the US Securities and Exchange Commission issued a roadmap for the transition to IFRS which could see the rules adopted by 2014.

IASB to improve derecognition requirements ...

The International Accounting Standards Board (IASB) has published a draft proposal aimed at improving the derecognition requirements for financial instruments. Read original article.

Derecognition occurs when an entity needs to remove an instrument from its financial statements.

The IASB is also proposing to enhance disclosure requirements in situations where a firm still has an ongoing involvement with an asset that has been removed from its statements in such a manner.

Sir David Tweedie, chairman of the IASB, explained that the use of special structures by banks to manage complex securitisation arrangements had brought this matter to the fore.

He said: "Financial structures have become increasingly complex and sophisticated, creating the need for improved ways of assessing whether an entity should derecognise assets or not."

The crisis also underlined the need for users of financial statements to have access to better information about off balance sheet risks, he added.

Recently, the IASB updated its fair value standards to bring them more closely into line with their US equivalents.

Diploma in IFRS Results

The results from the February 2008 sitting of the ICAI Diploma in International Financial Reporting Standards (IFRS) exam have just been published. In total 42 participants sat and were successful in the February exam, with over 60% receiving Distinctions.

The ICAI congratulates the following people:

• Martin Barry
• Clare Bourke
• Michelle Carroll
• JJ Comerford
• Margaret Deehan
• Niamh Fee
• Elizabeth Gildea
• Aidan Gorman
• Anna Kurchenko
• Colm Malone
• Garrett McCarthy
• Una McGuinness
• Brendan Molloy
• Thomas Murphy
• Margaret O'Neill
• Hugh O'Neill
• Bronagh Quigley
• Aisling Reenan
• Theresa Ryan
• Nicola Walsh
• Brian Gallagher
• Damian Gleeson
• Noel Gleeson
• Shane McKenna
• Denise O'Connell
• Lucy O'Connell
• Lisa Ryan
• Michelle Walshe
• Lauren Allman
• Andrea Flanagan
• Darren Harty
• Noel McLaughlin
• Erling Mitton
• Derval Molloy
• Liz Murphy
• Gerard John O'Gorman
• Adeline Smyth
• Paul Summers
• Niall Sweeney
• Michael Harty
• Sarah Williams
• Lynne Martin

To receive more information about the next session of the IFRS Diploma email ifrs@icai.ie

Off-balance sheet standards to be harmonised...

International accounting standards which deal with off-balance sheet activity are to be harmonised in response to the financial crisis, it has been revealed. Read original article.

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) announced the move following their latest meeting into the impact of the global recession.

Furthermore, the two boards are also set to work on analysing loan loss accounting within the financial instruments project.

Sir David Tweedie, chairman of the ISAB, explained that the fact that harmonising international accounting standards is such a complicated business is also what makes it necessary.

He said: "That is why in important areas such as financial instruments a common standard that significantly improves financial reporting and leads to a less complex approach is required. The path to achieving convergence will undoubtedly be challenging but the remit we have from policymakers is clear."

Earlier this month, the FASB issued two new proposals to improve guidance on fair value measurements and impairments.

The IASB has since asked for views on these submissions to see if it should adopt them as well.

G20 must promote IFRS

Convergence to IFRS is essential if the global economy is to receover, according to reports released by the ACCA and the ICAEW. Read original article.

Two of the UK's leading accounting bodies, the ACCA and the ICAEW, are calling for leaders to champion the global adoption of IFRS at this April's G20 summit.

The ACCA has released a discussion paper arguing that G20 leaders should endorse the benefits of IFRS because they will bring ‘transparency, comparability and clarity to reporting in the interests of shareholders, business and the wider public’.

ICAEW chief Michael Izza also spoke out, suggesting that convergence towards IFRS is losing momentum and that the new US administration should make a concerted effort to get onto the IFRS roadmap.

"We live in a world where global issues require global solutions", said Izza. "A fragmented financial reporting system will continue to hamper comparability and transparency across borders".

ACCA president Richard Aitken Davis called it a 'major failing' that IFRS is not already the global accounting language for all finance professionals, and argued: "Priority must be placed on ensuring that existing legislative and regulatory measures are implemented and enforced effectively. Rushing through large swathes of new legislation is not the answer"

The G20 leaders’ summit is due to take place in London on 2 April.

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ASBJ 'to adopt IFRS by 2011'...

The International Accounting Standards Board (IASB) has met with its Japanese counterpart in the hope of achieving convergence between their rules by 2011. Read original article.

It is the ninth such meeting between the IASB and the Accounting Standards Board of Japan (ASBJ).

Led by Sir David Tweedie, chairman of the IASB and Ikuo Nishikawa chairman of the ASBJ, the event focused on the convergence of Japanese Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).

Mr Nishikawa said: "In Japan, the potential use of IFRS by Japanese companies has been discussed since last year. From those discussions, it is clear that constituents wish us to accelerate our convergence project so as to complete it by the end of June 2011."

For this reason, the ASBJ and the IASB will continue to work closely together in order to meet this goal, he added.

Recently, the IASB made changes to IFRS 7, which relates to fair value measurements, in order to bring the standard into line with its US equivalent.

US Congress to discuss fair value rules...

Possible changes to fair value accountancy rules are set to be debated by the US House of Representatives. Read original article.

The rules, which are also known as mark-to-market regulations, have proved controversial in the wake of the economic downturn, with some claiming they are partly to blame for the liquidity problems facing banks.

Congressman Paul Kanjorski, who is to convene a meeting by the House Financial Services Subcommittee on the matter, explained that although there are currently problems with valuing sizable assets, this does not necessarily mean the rules should be scrapped.

He said: "While companies need stability, investors still need accurate information. We therefore cannot allow for fantasy accounting that wishes away bad assets by merely concealing them."

The subcommittee meeting will take place on Thursday March 12th.

Last week, the International Accounting Standards Board made changes to International Financial Reporting Standard 7 which relates to fair value practices, to bring it into line with the equivalent US rule.

New York CPA's present their arguments for IFRS resistance

by David McCann

The New York State Society of Certified Public Accountants (NYSSCPA) registered a broad range of concerns, addressing

• the quality of the international standards
• conversion costs
• an alleged contradiction the benefits of adopting IFRS put forth by the SEC
  
• eligibility criteria for early adopters
• and a forthcoming version of the standards for use by private companies.

Click here to read original article

The roadmap calls for the SEC to vote in 2011 whether to move forward with mandatory adoption, which under the existing plan would be phased in from 2012 to 2014. It also allows a limited number of large U.S. companies to adopt the international standards as early as this year.

The quality issue is foremost to the New York accountants. "The SEC Roadmap does not present, in sufficient detail, the methodology and criteria expected to be applied...in assessing the adequacy of IFRS," they wrote in their comment letter.

Apples and Oranges?
In their letter, the accountants seemed to question whether the SEC is doing enough to make sure financial reports that use IFRS will be comparable with one another.

Any assessment of the international standards, the NYSSCPA wrote, should consider whether they are consistent with the Financial Accounting Standards Board's Concepts Statements. They singled out Statement No. 1, which says that financial reports should provide information investors and creditors can use to make informed decisions, and Statement No. 2, which says comparability and consistency are important characteristics of financial statements.

The accountants also questioned whether the decision-making process of the International Accounting Standards Board, which promulgates IFRS, "is conducive to setting future high-quality standards." They criticized the IASB for its move last fall to let companies retroactively reclassify assets so they could "cherry pick" ones with significant losses and remove them from net-income calculations. In doing so, the international board gave in to pressure from the European Commission, the accountants suggested, saying they are concerned about "the influence of various national regulators, users, and others who promote the interests of their specific constituencies, as opposed to the needs of the worldwide community."

Further, the NYSSCPA said the supposed main benefits of adopting IFRS — comparability with non-U.S. reporting entities and allowing management greater judgment in preparing financial information — may both be desirable but appear inherently contradictory.

"The comparability of financial statements prepared in conformity with IFRS may be overstated," the comment letter said. "IFRS does not seem to be consistently applied from country to country, as the number of allowable options is conducive for the regulatory agencies in each country to interpret IFRS pursuant to their respective needs and business environments."

Comparability is further reduced, the letter added, by the tendency of preparers and auditors, "because of their habits of mind," to apply IFRS in a manner that is as similar to their current or former national accounting standards as possible. "When using principles-based standards, reasonable people arrive at materially different results after applying their judgments to a given set of facts and circumstances," the accountants wrote.

When and Who?
The letter also questioned the prudence of the conversion to IFRS when the depth and duration of the financial crisis are hard to predict. "It would be reasonable to conclude that the monetary and human capital costs of the transition could be burdensome to entities with limited resources and prohibitive for some smaller entities, even over a period of many years," it said.

An alternative, the NYSSCPA suggested, would be for FASB and IASB to vigorously pursue efforts to converge the American and international standards, which it said would produce the best-quality global standards and help minimize conversion costs for U.S. companies when IFRS adoption does finally become mandatory.

At the same time, though, the society said it fully supports allowing early adoption of IFRS, and in fact the eligibility criteria should be expanded. The roadmap suggests that the proposal to limit early use of IFRS to the 20 largest companies in so-called IFRS industries is grounded in an assumption that larger companies will be more likely to have sufficient expertise and resources to carry out the adoption.

"We disagree," the accounting society members wrote. "In fact, IFRS adoption experience in Europe has shown that smaller entities may need less time to complete the IFRS transition, while large companies with numerous subsidiaries in different countries may take as long as five years."

U.S. companies that are among the 20 largest worldwide in "IFRS industries" — such as oil and gas and some retail sectors in which IFRS is the most-often-used financial-reporting system — are eligible to adopt the international standards as early as this year. The SEC has estimated there are at least 110 such companies.

But, according to the accountants, the SEC potentially should let all filers in an IFRS industry be early adopters. If any restrictions are imposed, their basis should be the significance of the company's foreign operations rather than on market capitalization, they added.

Finally, the comment letter noted that while the SEC's authority is limited to public companies, many private and not-for-profit entities likely will convert as well. The problem is the version of the international standards designed for them, which IASB expects to roll out later this year.

"Full IFRS and the proposed IFRS for Private Entities represent a Big GAAP/Little GAAP system," the comment letter complained. "The accounting profession in the United States has consistently rejected Big GAAP/Little GAAP over the years. Any decision in 2011 to adopt IFRS must adequately address this concern."

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• Former SEC Chief Accountant Blames FASB for Meltdown
• The Human Side of IFRS
• Is the SEC Soft-Pedaling IFRS?
• Wrinkles in the IFRS Roadmap
• SEC: Early IFRS Adoption Will Cost Firms $32M

Related Web Sites

• NYSSCPA comment letter
• SEC roadmap