This time last year, the convergence
of IFRS and US GAAP appeared to be edging closer following the
release of the US Securities and Exchange Commission’s draft road
map. Twelve months on and an adoption date has faded from
sight.

The standardisation of global accounting
standards has been superseded by more pressing regulation problems
brought on by the global financial crisis. Despite this, firm
leaders believe IFRS convergence with US GAAP will come.

Grant Thornton International leader Ed Nusbaum
lists the global adoption of IFRS as the greatest challenge in
2010.

“In 2009, a series of events related to the
issue of market value assessments and valuation on assets impacted
the global adoption of IFRS. I’m hoping in 2010 we see more
progress towards the global adoption of IFRS and the convergence
with US standards,” he says.

Convergence important

Baker Tilly International leader Geoff Barnes
says despite the setbacks, his senior partners and the American
Institute of Certified Public Accountants believe IFRS will be
introduced in the US. This view is echoed by most firm leaders, who
all agree on the importance of moving towards one global set of
accounting standards.

“If you accept that all commerce is becoming
global and connected, then it makes logical sense and it’s
inevitable that we’ll have one set of rules,” says Ernst &
Young global chief operating officer John Ferraro.

Ferraro says it’s not as if people do not
believe in convergence, but issues do arise.

“I think the global fiscal crisis is a bump in
the road and causes people sometimes to say, ‘well, are we really
going to be connected? Is it helpful to be connected? Is it in our
interest to be connected?’ The short answer is yes,” he adds.

“I think the need is obvious; but the momentum
may slow sometimes.”

Tougher inspections

BDO International leader Jeremy Newman expects
inspection regimes to toughen over 2010. Crowe Horwath
International leader Frank Arford also predicts increased
regulation, both for clients and firms.

Mazars leader Patrick de Cambourg is not
certain this would be such a bad thing.

“I do not buy the argument that Europe would
be in a bad position if it was a little more secure than other
areas. I am not advocating super-regulation but I say we have to
apply the G20 [directives],” de Cambourg says. “Investors want
security. Without over-complicating things, we need to offer a more
secure environment.”