Are You Missing Next Big Boom in Accounting and Finance?
IFRS represents a once-in-a-generation opportunity for accountants and the profession. Some firms won’t be ready.
by Rick Telberg
Many finance and accounting professionals, their firms and companies may be wasting a once-in-a-lifetime opportunity if they allow their capabilities to stagnate or their skills to go stale. Take, for example, IFRS, short for International Financial Reporting Standards.
In the latest stop-and-go story of the globalized rules, it’s, well, if not “stop,” then at least “maybe later than last we thought.” As a result, some firms and corporations are putting their IFRS hiring and training programs on hold.
But that’s a big mistake. For one thing, the worldwide demand for IFRS technicians will be “huge,” according to Craig Walker, accounting and finance practice director for the Mergis recruiting agency. “Bigger than SOX,” he says, referring to the Sarbanes-Oxley Act, which remapped the accounting and auditing landscape in 2002.
IFRS will be bigger; it’s global. Today, Walker figures there are 12,000 companies in 100 countries that will be on IFRS eventually. Half the Fortune 500 companies have already gotten a head start by beginning to compile a shadow set of statements based on expected IFRS rules.
The second reason ignoring IFRS puts you at peril is that the firms that are continuing to accumulate IFRS assets are only lengthening their leads over those that aren’t. In general, the largest firms are the ones continuing to build, while some smaller competitors see an opportunity in the regulatory delays to also delay spending.
“There’s a lot of planning and preparation that goes into getting up to speed with IFRS,” Walker says. “You can’t afford to fall behind, while everyone else scoops up the knowledgeable people. When you go back into the market for IFRS people, who are you gong to find? Who will be left?”
While the competition in the IFRS trenches is forecast to be fierce, the effect on the profession could be beneficial overall. “It’ll be a real shot in the arm to the profession,” Walker says. He doesn’t need to add that it’ll also keep the profession’s recruiters busy, too.
“The prospects for a 25-year-old who knows IFRS with experience at a global firm,” Walker says, “will be incredible.”
While IFRS represents an opportunity for firms and companies willing to invest early and for 20-something upwardly mobile professionals, it also represents an opportunity, oddly enough, for today’s out-of-work senior financial executives.
It’s hard to count exactly how many senior finance executives and managers have been cut loose as a result of the market crash of 2007. But it may also be a good time for some of those professionals to get a jump on the IFRS boom to come.
“There are professionals out there who are studying IFRS, mastering it and actually doing consulting work in it today,” Walker says. “That’s going to give them options in the future — either to grow their consulting practice or go back to work in a corporate environment.”
A lot of accountants today had mothers who told them something like: “become an accountant; you’ll always find work.” Walker agrees, and it’s even better advice today applied to IFRS.
“Tell your sons and daughters,” he says, “accounting is a great place to be when you get a once-in-a-generation watershed event like IFRS.”
That tap-tap-tap sound you hear is opportunity knocking.
Copyright 2010 AICPA.
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6 Responses to Are You Missing Next Big Boom in Accounting and Finance? (Subscribe)
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Rick –
I see it differently. I see it as an opportunity for companies to further outsource jobs overseas.
What good is an IFRS expert here in the US if you can get the same overseas for 1/3 the price? At least with US GAAP, we were the worldwide experts.
I’m surprised that the AICPA isn’t more concerned with this impact on the profession. Already public accounting firms are outsourcing certain transactional based auditing processes overseas to India.
Companies such as Sears, Home Depot and Best Buy outsource practically their whole accounting functions overseas, including the controllership function. IFRS adoption in the US will only make outsourcing a more compelling option for companies. If a change this big were to impact other professions (medical, law, etc.) I would think their lobbies would be fighting against any change that would cause them harm in the long run. It seems accountants are the only ones who would allow this.
Granted, in the short-term there will be adoption/transition work which will make the public firms a ton of money. But long-term this is going to harm us. Once the accounting departments get outsourced, the auditors lose a client. It is sad that our country is heading in this direction.
Outsourcing blue collar jobs perhaps made some sense; outsourcing white-collar jobs makes none in the whole scheme of things.
Rick –
I agree that IFRS like the Sarbanes-Oxley Act will be as you indicate a “watershed” event for the profession.
“You’re not going to get very far in life based on what you already know. You’re going to advance in life by what you’re going to learn after you leave here….” – Charlie Munger, VP, Berkshire Hathaway in 2007 at USC commencement ceremony.
In line with the first respondent above, this IFRS thing is not good at all for US-based accountants. It would be like the AMA supporting “medical tourism” for Medicare patients or the bar associations withholding complaint when a proposal to allow anyone to practice law comes down the pipeline. In other words, it’s the AICPA that shows extreme lack of vision and is not representing its members.
Call it what you want, but the AICPA is the white collar equivalent of a union, just like the AMA or the ABA. As a union member, I demand representation. I also demand a stop to jobs just like mine being shipped to India. Is that too much to ask for? The dirty secret of free trade is that although the public benefits from lower costs of goods and services, the benefit comes directly from the lower wages of the affected industries. I admit to being selfish and wanting a higher wage; that’s why I joined the AICPA in the first place. As long as other countries permit the good ole USA to run deficits in perpetuity, every industry will be affected eventually. A balanced budget would equalize the flow of goods and services into the country against the flow outward.
Until we get that national budget balanced, that tap-tap sound that Rick hears is a lot like the giant sucking sound I hear of jobs – including CPA jobs – being moved overseas permanently.
Rick — I think the comments are really intriguing, and deserve a response. I’m very interested in your thoughts regarding the threat of CPA and accounting jobs going overseas accelerating with IFRS adoption.
Rick:
Very good article. It hits some very important points/predictions. However, I believe you should have included the downside of specializing in IFRS rules/conversions. Just like SOX work, IFRS conversions will come to an end. Then what? I was involved with SOX work when it first started. I had plenty of work and made lots of money. But, now all the SOX work is either automated with new software or outsourced. The point I’m trying to make is that IFRS will not last long (maybe 3-5 years). Once a company converts to IFRS, then all they have to do is purchase new software (SAP for example) or modify existing software to manage the conversion. The conversion process to IFRS is not complicated. Basically, it involves processing data in a different way to meet different rules and then formatting your outputs (financial reports) to account for the different rules. So, in the short term specializing in IFRS rules/conversions is great, but in the long-run it is not worth the time and investment for accountants. Personally, I would advise anyone interested in Finance/Accounting to invest their time and money in getting an MBA in global finance and then they should try to either setup or partnership with a company in India to do finance/accounting outsource work. That is the future of accounting!
Hello Everyone,
Thanks for the thorough feedback.
I was interested in learning what the potential downsides for these adoptions especially with the CPA exam making changes in 2011 for the IFRS.
I would still likely pursue the CPA, but it is moreso for the credential as the points made were interesting and alarming at the same time which means I am not looking to specialize in IFRS.
I agree that really was a challenge when all the SOX work dried up.
Thanks again for the wonderful insight.
Mark