The story of U.S. companies’ presumed forthcoming conversion to international financial reporting standards is not just about accounting and global commerce. It is also a people story: For starters, who should be trained (and when), who should provide the training, and what impact will an early mastery of IFRS have on an accountant’s career?
That last question brings an easy answer from those in a position to provide IFRS training, including college professors and professional services firms.
For career advancement purposes, gaining bona fide expertise in international standards in the short term may be a sure ticket to bountiful career rewards. “It’s one of two very hot areas, fair value being the other one,” said H. David Sherman, an accounting professor at Northeastern University and a former Securities and Exchange Commission academic fellow. “Anybody becoming an expert in either of those areas has a guaranteed career for many years.”
An accountant who establishes a position as the “go-to” person on IFRS within a company will have great influence over how the company appears to the public, especially analysts and investors, Sherman noted.
The footnotes to financial statements “are going to be much more important” than with U.S. generally accepted accounting principles, he said, because they will allow more flexibility in what and how information is presented. “It’s going to be a different kind of expert than we’ve had under GAAP, and that person is going to be extremely valuable because they will help the company understand what its real options are.”
Aaron Brooks, managing director of the Chicago office of professional services firm The Mergis Group, told of an accountant acquaintance who recently took a new job, only to soon become a victim of the “last-in, first-out” approach to a head-count reduction. “My advice to him: Get training in IFRS,” Brooks said. “This is a need that will continue to grow more pervasive within companies, and those who have IFRS experience are going to have more job security and more choices in their careers.”
At the Precipice?
To be sure, right now is an odd point in the march to convert U.S. companies to international standards — a moment of suspended animation between the departing and soon-to-enter presidential administrations and Securities and Exchange Commission regimes.
The solid motivations for having a single unified set of accounting standards worldwide will remain, no matter what. Still, it is not yet known whether the SEC’s new leaders, bowing to the financial crisis and the desires of many filers, will delay the current proposed timetable for IFRS adoption, or change any other particulars.
Under the SEC’s current IFRS-adoption roadmap, more than 100 large multinational companies that are already heavy users of IFRS globally can apply to be early adopters as soon as this year. Their task may be relatively easier than will be the case later for companies with less institutional knowledge on the subject.