Deloitte Global chief executive Jim Quigley has urged the US Securities and Exchange Commission (SEC) to set a time frame for the transition towards IFRS in the US in order to allow the market time to prepare for the radical shift.
Quigley expressed his views to the International Accounting Bulletin as Deloitte’s US firm released research that indicates companies are warming towards adopting the global standards.
“What I would like to see happen is that we would have the SEC move in that direction and I believe the pattern that has been followed in other capital markets is a pattern that has enabled the smooth and non-disruptive transition from one set of standards to another,” he said.
“That pattern has been declaring a certain date when all registrants would be required to file in accordance with those new standards and having a very clear roadmap to arrive at that destination. By providing a time in that declaration of, or requirement for, movement to IFRS, it allows the supply chain for that information to be built.
Quigley continued: “It allows companies to put in place the policies that they need to have that allows them to deal with any systems changes that will be required. It enables them time that would be needed for training and development and coming up the learning curve with respect to a new set of standards. Then you can make that transition in a non-disruptive way.
“We are working with clients today as they prepare for IFRS readiness in the US and helping them lay out their own individual roadmap to enable a smooth and effective transition.”
Quigley’s comments on an IFRS schedule were recently echoed by the American Institute of Certified Public Accountants.
There is speculation within the US profession that the SEC will gradually phase in the choice for US companies to use IFRS within a five-year period.
A new survey by Deloitte indicates that US companies’ interest levels in adopting IFRS is on the rise.
Thirty percent of CFOs and other senior finance professionals surveyed said they would consider adopting IFRS if given the choice within the next three years. Another 28 percent of respondents said they either lacked sufficient information to make a decision about IFRS, or they were simply undecided, leaving room for IFRS use to increase further.
Deloitte asked the same question in a survey six months earlier and only 20 percent of respondents said they would consider adopting IFRS if given the choice by the SEC.
Although this is only a 10 percent rise in IFRS interest, it is a sign that the world’s largest economy is slowly but surely making steps towards adopting global accounting standards.
Deloitte US IFRS Solutions Centre partner DJ Gannon commented: “As analysts and investors continue to accept IFRS as a reporting basis, the conversion to IFRS will impact the accounting industry both at the professional level and at the universities.
“It is important that professionals are in place and are equipped with the right education and training to support this industry event. Deloitte recently announced its IFRS University Consortium as a collaborative effort with the academic community to accelerate integration of IFRS into college curriculums.”