With nearly 120 countries having already adopted or agreed to adopt International Financial Reporting Standards, U.S. firms and practitioners have accepted the when-not-if scenario regarding IFRS convergence - but most report making preparations to the principles-based guidelines at a measured pace.

Though the roadmap to the adoption of IFRS awaits official approval, CPA firms are implementing varying degrees of in-house training and client education programs, while vendors are cobbling together CPE training and handbooks to ease the inevitable transition process.

Meanwhile, the Securities and Exchange Commission, which initially proposed its IFRS convergence roadmap in August 2008 under former Chairman Christopher Cox, has been criticized for what has been perceived as tepid and sporadic support of that timeline under new chair Mary Schapiro - a process that would have required U.S. issuers to begin reporting in IFRS in 2014.

"I don't think it's as much negative feeling as ambivalence on the SEC's part," opined Ken Marshall, the IFRS markets leader at Big Four firm Ernst & Young. "They had the Madoff scandal, then the financial crisis to deal with. Add to that, you didn't have a chief accountant appointed until August."

The SEC's recently appointed chief accountant, James Kroeker, said late last year that the regulator would return its attention to the IFRS roadmap, but stressed that both the International Accounting Standards Board and the Financial Accounting Standards Board should not wait for the SEC to make a decision on the final roadmap, and how the roadmap might ultimately change.

Both FASB Chairman Robert Herz and IASB Chairman Sir David Tweedie have maintained that their organizations aim to converge U.S. GAAP with IFRS by June 2011, a date that also was recommended by world leaders at the 2009 G-20 summit held last summer in Pittsburgh.

The SEC had been scheduled to make a definitive announcement on IFRS prior to the end of 2009, but didn't.

At E&Y, Marshall said that the firm has implemented a continuing IFRS "bridge education" program for audit and assurance professionals trained in GAAP, as well as helping explain to clients the differences between GAAP and IFRS, as the Big Four firm awaits an official determination.

"We have not accelerated the training, as we're not going to run any more people through than we have to," he said. "We're not really going to spend millions on educating 30,000 assurance professionals. We can always ramp up [the training] if we need to."

Troy Barton, a partner in the performance and finance group at consulting giant Accenture, said that his unit's IFRS training work consists of "helping clients translate policy decisions and the options around them that they would make. For our clients, the question is, how big is the impact and how do we help them prepare?"

As an example of some of the inherent problems with regard to conversion, he recently met with the finance and IT departments at three clients that operate roughly 40 different financial systems.

"This was a tremendous business case, as there was an immediate understanding that there was going to have to be a pre-journey to position them better [for convergence]," he said.

Barton explained that a large multinational company would most likely prefer an immediate adoption, whereas a small U.S. concern would prefer a gradual implementation sprinkled over several years.

He revealed that Accenture has developed an IFRS curriculum set with systems procedures that are aligned with the job functions within client companies: "We're looking at all options."

Anton Hayward, a shareholder in the financial reporting and assurance practice at Atlanta-based Bennett Thrasher, warned that firms need to get both their people and clients trained. "This creates a fantastic opportunity, because when else can you get the chance to begin with a clean slate?" said Hayward, a native of South Africa and a veteran of IFRS. "The problem is that for decades CPAs have been trained to apply rules, and not necessarily to think. The fundamental problem with GAAP is that a rule says you've got to do this or do that, whether that rule makes sense or not. IFRS is a completely different framework, not a line-by-line conversion."

Hayward said that both he and his firm hold a number of informal IFRS discussions for interested clients, and recently hosted a CFO roundtable on IFRS for members of the Georgia Society of CPAs.

"It's not yet on our clients' radar, but we do keep them up to date on it," reported Scott Walters, a partner in the audit practice at Florida-based Daszkal Bolton. "Right now their focus is very nearsighted on SOX 404(b) and its ratification this year. "

Walters said that whenever the firm conducts internal training on U.S. GAAP, it typically includes a point where the similarities and differences between GAAP and IFRS are addressed.

Walters, who was previously with Deutsche Telekom, was part of the team that undertook the parallel conversion from German GAAP to IFRS.

"IFRS are written general enough to be applied to myriad situations, so if you have three to four instances of professional judgment, each would be supportable, whereas all of them would not be under GAAP," he noted.

CONTINUING EDUCATION

The American Institute of CPAs is currently developing a resource that compares the IFRS for Small and Medium-Sized Entities, which was issued by the IASB in July, with corresponding requirements of U.S. GAAP. Last year, the institute unveiled IFRS Resources, a comprehensive portal dedicated to member education on IFRS. In 2011, the CPA Exam will begin including questions on IFRS.

In October, the institute's semi-annual IFRS survey showed that CPA firms had delayed taking steps in preparation for IFRS adoption, though more than half of those polled indicated that they would need to bolster their knowledge of IFRS within one to three years.

Meanwhile, the Tax & Accounting business of Thomson Reuters is in the process of compiling IFRS Reporter, which, when ready, will be available on the company's flagship Checkpoint platform, while its International Accounting and Financial Reporting product helps users identify more than 200 differences between GAAP and IFRS.

"Most of the pronouncements coming out already have a strong convergence element to them," explained Wayne Kerr, senior AuditWatch analyst with the CPE division of Tax & Accounting at Thomson Reuters. "What it boils down to is that essentially we don't have a date [for IFRS]. We don't know until the SEC knows, and we don't know if even they know."

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