IFRS is coming. GAAP is dead. Get on board or get run over.
Jim Metzler, AICPA Vice President for small firm interests, says even local firms and sole practitioners need to know about International Financial Reporting Standards.
For decades, changes in the global marketplace — and particularly in international accounting standards — had little direct impact on CPAs in smaller firms.
“That’s no longer the case,” Metzler says. Today “the United States is heading toward convergence with international accounting standards.”
(More at Small Firms Can Meet Clients’ IFRS Needs.)
2 Responses to “Small Firms Can’t Ignore IFRS Any Longer”
Bill Teague
It’s probably smart for most CPAs and accountants to monitor and become more cognizant of IFRS issues, but in reading Jim Metzler’s editorial, I wasn’t quite sure of what client needs or other levers drive the need for small business reporting to comply with IFRS any time soon, even if the SEC proceeds as announced — at least when the client company is not being traded publicly.
Most if not all small businesses in many CPAs’ client list are domestically owned; many CPAs eschew publicly traded companies as a conscious practice decision so they don’t have to focus as intently on GAAP compliance in the first place.
The world is getting smaller, and U.S. small businesses are increasingly likely to interact directly with foreign vendors and customers; but does this likely interaction necessarily primarily drive adherence IFRS reporting?
I’m ignorant here, but I’m wondering if for some readers this effort is another wrinkle to familiar and unresolved Big GAAP/Little GAAP tensions.
(DISCLOSURE 1: Some years ago in an earlier job, I was an editor at a publishing house that brought out one of Mr. Metzler’s successful books. We also published his popular contributions to several paid-circulation newsletters. So I know how astute Mr. Metzler is in understanding how accounting firms tick, and I would respect any suggestions he makes. However, I didn’t see comments from him explicitly addressing how IFRS might affect needs of non-GAAP clients.)
(DISCLOSURE 2: In my current role I edit a free accounting newsletter for Intuit; they seem to understand global reach. In QuickBooks 2009, Intuit is introducing multi-currency capability, along with a new tool that lets CPAs slice and dice and reformat QuickBooks data within Excel for multiple compliance needs.)
Lynn Northrup
I think helping businesses understand IFRS is a critical business issue. CPAs need to realize not only their responsibilities to help business but also the opportunities that exist by becoming engaged in this education effort. All too many CPAs are satisfied with their tax and accounting practices and seem both reluctant and unprepared to help businesses in a number of ways. The CPAs who do commit to these initiatives will run well ahead of the pack.