The majority of US financial leaders are not prepared to adopt
IFRS, according to a Grant Thornton US survey. Three quarters of
chief financial officers and controllers that took part in a survey
of more than 220 financial leaders admitted they have no experience
preparing financial statements using International Financial
Reporting Standards (IFRS). A similar proportion supported the use
of principles-based standards while 69 percent believed accounting
standards are too complex.

Grant Thornton US chief executive Ed Nusbaum told the
International Accounting Bulletin the study confirms the
verdict of IFRS experts speaking with The Accountant
recently – that the US is well behind Europe and the rest of the
world in terms of understanding IFRS and being able to implement it
in the near future.

Nusbaum predicts the US Securities and Exchange Commission could
introduce the choice for US companies to prepare financial
statements using IFRS as early as 2010, but a more realistic
timeframe for the corporate community to be prepared would be
2013.

“In order for this to work, corporate America has to be
prepared. It is not just about having the accountants at Grant
Thornton or at any other firm prepared, it is a matter of having
the individual controller and the accounts receivable clerk and all
the massive accounting staffs in companies prepared. That is really
the driving force, not when the accounting firms will be prepared,”
he said.

Nusbaum predicted the impact of IFRS to the US economy will be
larger and more widespread than that of the Sarbanes-Oxley Act. “In
terms of a cost for a single, large public company it is hard to
tell whether it will be more or less than the previous cost. In
terms of the overall effort across the United States, it is much
more massive because you are really talking about a fundamental
change in accounting. Every professor in every university across
the US, every student, every accountant within a company, every
accountant in public accounting firms like Grant Thornton need to
be educated,” he explained. “There are tens of thousands if not
hundreds of thousands of non-listed private companies in the United
States that could be impacted by this that are not at all by the
Sarbanes-Oxley legislation.”

Grant Thornton has already begun an exercise to train between
2,000 to 2,500 staff at a cost of “hundreds of thousands if not
millions” of dollars. Nusbaum said the overall IFRS training effort
will be phased in over years and could involve 100 hours per
person. “I think all of the firms that are global need to be
prepared on IFRS and Grant Thornton is already prepared and will be
even further prepared as it moves on in the US,” he said.

Arvind Hickman