Scots experts help US accountancy shake-up

Published on Saturday 9 May 2009 14:24

SCOTTISH expertise is being called on to help North America switch to International Financial Reporting Standards (IFRS) which are already used in the UK.

A number of countries, including Canada, the US and Mexico, are to transfer from using local accountancy standards to IFRS. The aim is to provide more consistency and transparency for investors across the world.

In Canada, companies will have to report IFRS statements from 31 December, 2011. No deadline has been set for the US yet, as proposed rules are still to be given the go-ahead.

Mark Allison, executive director, education at the Institute of Chartered Accountants of Scotland (ICAS) and chairman of the International Accounting Education Standards Board, said there are opportunities for UK firms to provide expertise to the US as they share a common language and culture. It is providing help to its sister body in the US to prepare IFRS exam papers.

BDO Stoy Hayward is sending Gary Drennan, director of business assurance, from its Glasgow office to lead its push on IFRS in North America. He will be based in Chicago and will recruit a team to work with him. BDO hopes to win IFRS-transfer business off the Big Four accountancy firms, as businesses will not be allowed to use their auditors for the transition.

Companies will start work on the move from the Canadian Accounting Standards Board to IFRS this year. Around 3,000 businesses will have to switch in Canada.

In the US the Securities & Exchange Commission (SEC) has published a timetable that says companies should complete the transfer from local GAAP standards between 2014 and 2016. However, this "roadmap" could change. Mary Schapiro, recently appointed chairman of the SEC, has indicated she will not be bound by the timetable published before she took up the post. Schapiro has said that she will only "proceed with great caution", which has created uncertainty among businesses.

Drennan said: "General consensus seems to be that with the change in administration in the US there has been a slowdown (in the transition]."

He warns that with many world economies in recession, US companies are concerned about the cost of converting to IFRS. It has been estimated that companies with revenues between 446 million and 4.5 billion will spend about 0.5 per cent of that total on the switch.