What seems like a lifetime ago, I was sitting in 7th grade math class - come to think of it, that was a lifetime ago - being lectured by Mrs. Kennedy on the U.S.'s inevitable conversion to the metric system. Mrs. Kennedy was ruddy-faced, rail-thin and hailed from County Mayo, Ireland. She had a penchant for white-framed cat's-eye glasses and, when angered, was able to reach a decibel level that could mute a heavy metal concert. She augmented the regular curricula with a focus on metric problems and conversion exercises, and by the end of the year, we were able to map out car trips in kilometers and judge the results of encroaching puberty in kilograms and centimeters.
Sadly for her, her painstaking preparation was rendered moot, as the metric incursion never managed to cross the Atlantic or penetrate our northern and southern borders.
Flash forward more years than I care to recall, and I get a familiar feeling with regard to International Financial Reporting Standards. For a while, it looked like the U.S. was eager to sign on, with former SEC Chairman Christopher Cox being one of the loudest proponents and his agency offering up a roadmap for an adoption timetable. But with the change in administration came a new SEC chair, Mary Schapiro, who, until lately, had given no indication that her agency was going to be tethered to a schedule drawn up by her predecessor. Add to that the burdens placed upon the regulator by the financial crisis and the mounds of egg that needed to be wiped off its face after its disgraceful inaction and missed chances in the Madoff scandal, and clearly adoption of international accounting standards was in no danger of vaulting to the top of its "to-do" list.
The SEC has subsequently reversed that position somewhat, as Chief Accountant James Kroeker recently told attendees at a conference in New York that a return to the roadmap is perhaps a prudent course of action to take.
But there are more than a few potholes that have to be filled first, not the least of which is getting a lengthy roster of countries to agree on anything, let alone something as complex as accounting standards. Then there's the problem of natural evolution, as IFRS in 2011 is sure to be a bit different from IFRS in 2014 - the adoption date for the SEC roadmap offered up during Cox's chairmanship.
Regardless of whatever timetable is eventually adopted or how smoothly the transition to the sometimes-amorphous arena of principles-based professional judgment goes, the convergence movement has to begin not only within firms, but also within the halls of academe.
Recently, Big Four firm KPMG and the American Accounting Association surveyed some 500 accounting professors about IFRS, and more than 80 percent of them indicated that international standards need to be immediately incorporated into the accounting curricula - or at the least by 2011 - with about half maintaining that the U.S. should transition to IFRS to remain competitive.
The ongoing school of thought is that in order to remain competitive on a global basis, the U.S. has to adopt a single set of global accounting standards, and all the polling statistics in the world probably won't expedite that. But if and when that happens, we had better have future generations of accountants prepared for that eventuality.
I'm sure Mrs. Kennedy would be happy to explain how to do just that - loudly.
