Hoogervorst said U.S. sovereignty would be protected by the SEC having a final say before any IASB rule is introduced. “Such endorsement mechanisms provide an important ‘circuit breaker’ if the IASB produced a standard with fundamental problems for the United States,” Hoogervorst told an accounting conference. The SEC would remain in full control of enforcement. “So there is absolutely no danger of importing different enforcement standards from abroad into the United States,” the former Dutch finance minister added. [Reuters]
Tag: IFRS
Who Among Us Considers the IASB a “Success Story”?
Count IASB Vice Chairman Ian Mackintosh as one.
Ian Mackintosh called the IASB a success story, saying global standards are now accepted in more than 120 countries and high-profile non-signer the US will make a decision later this year.
A high-profile non-signer who increasingly sounds pessimistic about the whole exercise. Oh! India and Japan aren’t sold either. Sounds like a winner, doesn’t it?
Investors: IFRS unfit for purpose [Accountancy Age]
How To Make Yourself More Marketable In This Economy
Lately, it feels like a lot of you are trying to jump ship, rally against “The Man” or trap a firm into poaching you like a 19-year-old actress catches a predator. Maybe you guys have always been like that and it only feels like it’s happening more often now that we email each other about it but I’m sensing a pattern here.
Anyway, there are a few things you can do (and a couple you absolutely shouldn’t) that can help you on that road. Maybe these are obvious to you; if so, congratulations. Let’s just go over them again anyway, not everyone is as good at this as you.
1. Learn IFRS. Or at least have a baseline knowledge extensive enough to fake it when you have to talk to people who actually care and/or know more than you. What this means is that you can either take a class, some CPE, maybe get a “free” masters on your firm’s dime or read a damn book. Whatever you do, remember that unless you are at an IFRS conference, chances are you don’t have to be an expert on the matter, just knowledgeable enough to appear as though you have some idea what you are talking about. If you have the opportunity to actually work on IFRS financial statements at work, do it. It’ll be an awesome item on your resume.
2. Don’t get a useless degree. “Useless” is, of course, defined by how far you want to go and where. Please take inventory of your personal situation to define “useless degree” for your own circumstances. For some of you, this is a MAcc. For some, it is an MBA from a for-profit. For others, it is a bachelors in philosophy. Whatever it is, avoid it at all costs, even if you can afford it. Get by on your merits and don’t waste your time pursuing education you don’t need. If you’re that bored, find a hobby.
3. Learn how to play the game. You can’t negotiate a better salary if you are spending half the day on the Internet interrogating strangers about their salaries in our comment section. We don’t care either way but if you are trying to elbow your way into a better salary, you may have to actually try to set yourself apart from your slacker colleagues.
4. Pass the CPA exam. Before some troll shows up and asks me why I haven’t done #4, I’m not trying to market myself as a CPA, writing about this and helping actual CPAs have a single “water cooler” to sit around is much more fulfilling. For people who actually want to work in this industry, this one is pretty necessary. If you actually focus on getting it done sooner rather than later, you’ll save yourself a lot of pain later down the road. As for me, I’m sure I’ll be deflecting this same troll 5 years from now when you’re making way more money than I am writing these articles. Feel free to rub it in.
5. Know your enemy. Some of you are vicious, money-grubbing pricks and I really love that about you. If you believe it when partners say “you really have potential” and tossed a few extra back at your recruiting events to “loosen up a bit,” you’re going to have to understand what it is you want and how best to get it. For some of you, more money is enough until you want more money after that. For others, you just want to experience the thrill of being wanted by several firms at once. Whatever your vice, you need to analyze your own strengths and weaknesses before you try to get three firms to bitchfight over who gets to have you. You can’t negotiate if you’re delusional about what you offer to any of them.
IASB Chairman: You Can’t Stop IFRS; You Can’t Even Hope to Contain It
“It is my strong conviction that the momentum behind IFRS is so strong right now it can only be delayed but it cannot be stopped any more,” IASB’s chairman Hans Hoogervorst said.
The United States has an “extremely important” decision to make this year on whether to replace its own Generally Accepted Accounting Principles (GAAP)standard with IASB rules, Hoogervorst told a webcast meeting of the IASB’s trustees in New York. By next year two thirds of the world’s top 20 economies (G20) will be allowing or requiring local listed companies to use the IFRS accounting rules. [Reuters, Earlier]
Some Are Suggesting That the IASB Is Filled with a Bunch of Spineless Jellyfish
Representatives of large institutional investors told the Securities and Exchange Commission on Thursday that they had serious qualms about the London-based International Accounting Standards Board replacing the U.S. Financial Accounting Standards Board as the primary arbiter of accounting rules in this country.
Speaking at an SEC panel focusing on investor views of international financial reporting standards, the representatives roundly supported the goal of establishing a single set of high-quality global financial reporting standards in the United States in the form of IFRS. But they suggested that the IASB, the current promulgator of IFRS, lacks the backbone and outreach capability of FASB — qualities that would be needed for a global system to succeed. [CFO]
CFO Seizes Opportunity to Unite Disgust for IFRS, Metric System
If W. Anderson Bishop wanted to sound like a person who is refusing to adopt a different system of measurement because A) it was developed outside the United States B) doing things the easy way is dumb or C) he’s a crusty old fart, he has succeed admirably.
“We didn’t join the metric system when everybody else did,” says W. Anderson Bishop, [Hallador Energy Co.’s] chief financial officer. U.S. accounting rules are “the gold standard, and why would we want to lower our standards just to make the rest of the world happy?”
Japan Getting Cold Feet on IFRS
On the day of Sir David Tweedie’s retirement, no less.
Japan is considering postponing the mandatory introduction of global accounting standards for all listed companies beyond the original target date of 2015, amid strong opposition to the change from the country’s business community. Japan’s financial services minister, Shozaburo Jimi, said Thursday at a Business Accounting Council meeting, hosted by the Financial Services Agency, that making Japanese companies adopt the rule—known as the International Financial Reporting Standard—within a few years could be a big burden and costly for businesses. “If Japanese firms are required to move to IFRS, we will need enough time, five to seven years, for preparation,” Mr. Jimi said, adding that discussions over the matter will take time.
India Is Still Balking at This Whole Convergence to IFRS Thing
In May, IASB member Prabhakar Kalavacherla threatened India by telling a conference in Mumbai “to put it in one sentence, we strongly encourage adoption as against convergence,” suggesting that India could totally contribute to the rule-setting if it will just go ahead and adopt IFRS now. That sort of attitude is hilarious and why watching the IFRS “condorsement” plan getting burped up around the world is so much fun. Really? Adopt first, ask questions later?
India isn’t buying it, although looking to the U.S. and Japan for answers isn’t going to help matters either.
The Economic Times has the story:
The government is planning to introduce additional changes to global accounting standard, IFRS, to make it more palatable for Indian companies, overriding the international opposition to amendments already made. Such a move will extend the eventual migration by Indian companies to the global standard and also insulate local firms from any short-term capital market shocks that may arise due to erosion in valuations.
However, any changes to the Indian version of the International Financial Reporting Standards (IFRS) will take time as the government will initially look at some of the revisions being suggested globally, specially by the developed markets of US and Japan, before finalising the road map, secretary, ministry of corporate affairs D K Mittal told ET on Thursday. “We have to see how IFRS will meet our requirements. Our markets are different, our standards are different,” he said.
Quote of the convergence! “Our markets are different, our standards are different.” I’m sorry, maybe I’m confused on how this convergence thing is supposed to work (entirely possible as I’m not an accountant and therefore not required to understand what’s happening here) but couldn’t each country getting IFRS shoved down its throat say the same? That’s why global economies are (read: were) such a beautiful thing; different markets breed different standards, and market participants have the option to say whether or not they find a particular country’s financial standards appealing. With forced adoption of a single arbitrary standard, determined by an entity with questionable self-interest at work, you take away investors’ ability to put their money where their mouth is.
GAAP has obviously failed. The evaporation of capital in the United States over the last 3 years proves it. But the whole Adopt-or-Else plan isn’t necessarily any better either.
In my humble opinion, it just makes the IASB look desperate and India look awesome. For now.
Sir David Tweedie’s Accounting Rock Star Status Is Safe Despite His Failure to Converge Standards
In case you forgot, Sir David Tweedie is retiring next week as the head of the IASB. It’s been quite a run for Tweeds and good money says his friends at the Board will send him off in style worthy of a knighted Scotsman (read: getting him blind drunk and some hooliganism). He’s had many accomplishments in his time running the IASB but there’s one goal that will ultimately elude him when he hangs up the eyeshade. That is the dream of converged accounting standards. It certainly has been a noble quest worthy of his accounting “rock star” status but you can’t help but imagine that you might happen across SDT in a pub muttering to himself over a pint about “the one that got away.”
Sir David’s biggest project has been convergence of IASB’s rules with those of America’s Financial Accounting Standards Board (FASB). The two had set a June deadline, timed to coincide with Sir David’s retirement, to iron out their differences. That won’t be met.
Just because he won’t reach his ultimate goal that doesn’t mean Tweeds hasn’t tried. Or been BEEN INFINITELY FUCKING PATIENT with the Yanks.
But you can’t do it all. So now the task of accounting rule copulation will now fall to Dutchman Hans Hoogevorst but if Sir David is feeling a little like a failure, he should know that there are people out there still think he’s pretty badass since he got the SEC to come to the table:
Sir David should not be too disappointed that convergence is not complete. That the process has come as far as it has—and that America’s Securities and Exchange Commission might decide later this year to adopt IASB’s standards—is something no one could have predicted ten years ago, says Nigel Sleigh-Johnson of the Institute of Chartered Accountants of England and Wales.
So enjoy your retirement, oh knighted one. Your double-entry immortality is secure.
The balladeer of the balance-sheet [The Economist]
Confidential to Sir David Tweedie: Mary Schapiro Isn’t Hearing Encouraging Words on IFRS
Speaking at The Wall Street Journal’s annual CFO Network meeting in Washington D.C., Schapiro readily admitted that there isn’t a big push from either multinationals or shareholders to move to international financial reporting standards.
In response to a question from Bank of America’s CFO, Chuck Noski, Schapiro said, “We have not heard from a lot of shareholders that we have to go (to IFRS). We’ve heard the contrary… ‘Why would we take this step toward international accounting standards?’” [CFOJ]
IASB Would Prefer If India Were to Play Ball, Adopt IFRS
The International Accounting Standards Board is none-too-pleased that India has retreated from plans to fully adopt International Financial Reporting Standards this year and is a making a public push to get the country back on track. A failure to persuade India on the issue would raise serious questions about how successful IASB can be in convincing other major economies, including the U.S., China and Japan, to make a full switch. “To put it in one sentence, we strongly encourage adoption as against convergence,” IASB member Prabhakar Kalavacherla said at a conference in Mumbai last week, according to a copy of his speech, where he urged India to take a bigger role in international standard setting to address its concerns. [CFO Journal]
CPA Exam Candidate Is Worried About IFRS in AUD
The gmailmen have delivered the following reader question:
Hey Adrienne,
I have already passed BEC back in November 2010, and am sitting for AUD next week. I know with IFRS now being included in the curriculum, I can expect to see a few questions related to IFRS topics. I only have 2009 study materials, so they do not include IFRS.
I know with FAR and REG I will most likely need to either A) Buy new materials or B) borrow another coworker’s, but as far as the AUD test, how much emphasis should I put on studying the IFRS material at this point a week before my exam. I figure a day or 2 to skim through the IFRS stuff should suffice?
Thanks in advance for the advice!
Let’s once again for the 10,000th time consult the CSOs (Content Specification Outlines) for the information we need. When in doubt, this is your go-to for what will be covered on the exam and in what concentrations. While the AICPA doesn’t give exact figures (such as “you’ll get 15 bonds questions per FAR exam”), it is a great tool for figuring out what you can blow off and what you’re going to see a lot of. Hint: no matter what the CSOs say, your particular exam will probably contain an unusually large number of questions on whichever topic you chose not to study.
That being said, the good news is that IFRS has very little relevance in Audit at all (in comparison to FAR, as you pointed out). However, international auditing standards will be tested in AUD, and that part you are going to need to know.
Can you study from outdated AUD materials and still pass? It’s certainly possible. New material only makes up 5 – 10% of the 2011 exam by my estimation (based on the CSOs, my gut feeling and feedback from candidates who have sat for the exam this year), so it’s not all that crazy to suggest that you could do really, really well on old material and still pass. Keep in mind, however, that most people do not do really, really well on any material, new or old.
I would suggest, at a minimum, picking up a used 2011 textbook from Amazon and flipping through the new material. Entire sections have been moved in and out of Audit, meaning you’re going to be missing a huge chunk of it if you’re studying from such outdated material.
Think about it: the exam changes twice a year. So if you have materials from 2009, the exam has changed 4 or 5 times since then, once significantly. Normally this might mean missing a handful of questions but in the case of CBT-e, I suspect the AICPA will be testing larger numbers of new questions going forward as they get more comfortable with the new format.
Good luck!