July 11, 2008
What do IFRS and "Wealth Transfer" Have in Common?
The current deadline for companies traded on Canadian public exchanges to begin disclosing their plans for conversion from Canadian GAAP to IFRS is 2008 for December 31 filers. This is a substantial change. Approximately 28 other countries have accomplished this change and lived to talk about it - EU member countries, South Africa, Australia to name a few.
But similar to the SOX 404 feeding frenzy by certain large accounting firms, there has been an attempt to scare Canadian public companies into a large "wealth transfer" from public company coffers to once again those of the large accounting firms.
While yes there is substantial work involved and it is not to be taken lightly, accountants in public companies are intelligent enough to accomplish this task without spending millions with the large firms. They learned GAAP so they can learn IFRS.
Additionally, there is no getting away from learning IFRS because it will be the new standard companies will be using. So do not outsource the chance to get involved and learn the ins and outs and manage your own conversion project.
A common complaint we hear in our work with public companies is that the large firms are just now training their own people so it is the same song second verse folks. SOX 404 all over again. The firms are using pressure to negotiate massive contracts with clients and then train their people on the job. They set out a work plan that guarantees the most tedious approach with the most amount of work possible.
Do not be fooled into thinking your internal team cannot handle this challenge. Yes it is work. Yes you must take it seriously. But is not so massive or difficult that you need to outsource the task, knowledge and train accounting firm personnel rather than your own. This is the new standard, better to take it on and own it early to make the best decisions. No one knows your company's requirements better than your team does.
But similar to the SOX 404 feeding frenzy by certain large accounting firms, there has been an attempt to scare Canadian public companies into a large "wealth transfer" from public company coffers to once again those of the large accounting firms.
While yes there is substantial work involved and it is not to be taken lightly, accountants in public companies are intelligent enough to accomplish this task without spending millions with the large firms. They learned GAAP so they can learn IFRS.
Additionally, there is no getting away from learning IFRS because it will be the new standard companies will be using. So do not outsource the chance to get involved and learn the ins and outs and manage your own conversion project.
A common complaint we hear in our work with public companies is that the large firms are just now training their own people so it is the same song second verse folks. SOX 404 all over again. The firms are using pressure to negotiate massive contracts with clients and then train their people on the job. They set out a work plan that guarantees the most tedious approach with the most amount of work possible.
Do not be fooled into thinking your internal team cannot handle this challenge. Yes it is work. Yes you must take it seriously. But is not so massive or difficult that you need to outsource the task, knowledge and train accounting firm personnel rather than your own. This is the new standard, better to take it on and own it early to make the best decisions. No one knows your company's requirements better than your team does.
