Companies Unprepared for International Standards

Nearly half of U.S. companies have made no preparation to adopt International Financial Reporting Standards, according to a new survey.

IFRS and U.S. generally accepted accounting principles are in the process of converging. The Securities and Exchange Commission recently proposed a roadmap that would allow the largest U.S. companies to begin filing statements in accordance with IFRS in 2010, with most large public companies switching to IFRS by 2014 (see SEC Proposes IFRS Roadmap). The survey by Protiviti, a consulting firm and subsidiary of accounting recruiter Robert Half International, shows that many companies are unprepared for the transition.

Nevertheless, more than 40 percent of the survey respondents said that if the SEC allows a choice between using U.S. GAAP and IFRS, their organizations would choose to switch to IFRS. More than 60 percent of respondents anticipate at least a moderate cost impact in transitioning to IFRS.

Survey respondents included CFOs, who made up almost half of survey participants, along with CEOs, chief audit executives, vice presidents, controllers, and directors of finance and financial reporting.

Protiviti mainly conducted the survey at the 2008 Financial Executives International Summit, with additional responses gathered online from Protiviti KnowledgeLeader subscribers. A total of 75 executives participated in the study.