International Financial Reporting Standards (IFRS) will continue to be more prevalent in the accounting landscape. Regardless of the SEC’s strategy of procrastination, it is the opinion of many that it’s a matter of “when” the standards will ultimately be adopted by public companies in the United States, not “if.”

There are many questi have related to this important issue. Accordingly, we’re opening a dialogue with experts of all opinions about IFRS so that you may be better prepared for this monumental development in financial reporting.

Bob Bunting is the President of the International Federation of Accountants (IFAC). Mr Bunting is former Chairman of the AICPA Board of Directors and the former Chairman and CEO of Moss Adams, serving in that role from 1982 to 2004. He currently serves as the lead partner for Moss Adams’ International Services Group.

Do you support the adoption of International Financial Reporting Standards in the United States? Please explain why or why not.

We definitely support the ultimate adoption of IFRS for publicly listed companies in the United States. Our principal trading partners, including Europe, Canada, China, India, Brazil, and Mexico, have already either adopted IFRS or are well on their way to a mandatory adoption date. Most U.S. public companies have at least some exposure to foreign markets and will have to grapple with IFRS even if it’s not the U.S. standard. The cost of conversion to IFRS in the United States will pale in comparison to the long-term costs of dealing with a dominant world standard (IFRS) for out-of-country reporting and having to maintain U.S. GAAP systems and reports for U.S.-only reporting.

What’s the most common argument you hear against IFRS?

There are a number of myths associated with IFRS. One is that it’s a “foreign” standard. In fact, the United States has been a dominant force in the International Accounting Standards Board (IASB) from its inception, and the convergence process between the IASB and the U.S. FASB has profoundly affected the shape and direction of IFRS for many years. Another complaint is that IFRS might not be “robust” enough for the U.S. market. This comes in part from the fact that IFRS is principles-based and U.S. GAAP is rules-based. Codified U.S. GAAP runs approximately 17,000 pages of text because of its rules orientation, whereas IFRS runs fewer than 3,000 pages. Since the FASB and IASB have been on a path to converging the two standards for more than six years, it’s hard to argue that one standard is more robust than the other.

If I’m a client that is skeptical of IFRS how do you convince me that A) it’s the best thing for my company from a financial reporting perspective and B) it’s the best thing for my company from a cost perspective?

IFRS may not be the best near-term option for a purely domestic U.S.-based company. However, companies with substantial international footprints have found that the cost of operating under two standards is far greater than operating under one. This cost will seem increasingly burdensome if the United States becomes the only country in the world not using IFRS.

Does it make a difference if the United States follows one set of rules and the rest of the world follows another set of rules?

It could make a huge difference, as the U.S. banking industry discovered in the early stages of the financial crisis. A good illustration of this is the debate over fair value. Multinational companies compete for capital globally. If U.S. and international standards require different approaches to fair value, it’s highly likely that either U.S. companies or their foreign competitors may find that their respective financial performance looks better or worse under one set of standards than the other. Companies reporting under the more attractive standard may report better results. In extreme cases those results could be the difference between apparent success and technical violation of lending covenants or even bankruptcy.

It’s a big challenge for accounting professionals to keep up with the rules that they currently follow. Is it reasonable to expect them to prepare for a switch to standards that will drastically change their methods?

We recognize that many accountants might be tempted to make this argument. However, as capital, trade, and even small companies become more global, an ever-larger portion of the accounting profession has been forced to learn at least two standards (IFRS and U.S. GAAP). This large and growing portion of the accounting workforce recognizes that one standard is a lot easier to keep up with than two. As IFRS grows in its dominance—and make no mistake, it’s overwhelmingly the dominant standard—U.S. accountants run the risk of having their skills marginalized and their job prospects limited by their desire to avoid change.

Only a small number of colleges and universities are implementing international rules and standards in their curriculum. How will higher ed catch up?

I visit with many U.S. accounting professors in my role as president of IFAC. Virtually all that I have met with are introducing IFRS content in their accounting curriculum. Most seem to accept that IFRS is an eventual certainty, and they would love to have better guidance from the regulators so that they can plan for transition better. Additionally, financial reporting is only one part of an accounting education. Integrating IFRS into a curriculum should involve three or four classes out of dozens that accounting students are required to take.

How would you respond to the argument that the only people that will benefit from the conversion to IFRS are the partners in large public accounting firms?

While adoption of IFRS in the United States will create new revenues for some accounting firms, they won’t be the principal beneficiaries. I’m pretty sure that the SEC commissioners did not confirm the IFRS road map to enrich accountants of any stripe. IFRS adoption is ultimately necessary to keep U.S. businesses competitive in the global contest for capital and investors. U.S.-based multinational companies have been strong supporters of IFRS adoption as a means of reducing their financial reporting costs and ensuring a level playing field with their foreign competitors. This ultimately benefits U.S. investors, and this is whom the SEC commissioners are charged with protecting.

The SEC remains cautious with regard to IFRS. What is your reaction to their recent announcement?

The SEC is charged with protecting U.S. investor interests. They’ve expressed concern about the lack of investor input during the comment period following the original publication of the road map. They’ve committed to gathering further input from investors as part of the new work plan. The fact that the commissioners recommitted to the road map, with some changes, suggests that they think adoption of IFRS is more likely than not to be in investors’ best interests. It seems prudent to be cautious and seek more input, but we doubt that the outcome of this process will do much to change the commissioners’ decision.