Submitted by: Submitted by cbcd
Views: 428
Words: 588
Pages: 3
Category: Business and Industry
Date Submitted: 06/23/2010 08:02 PM
No easy task
By Rafal Kuczynski
The article, “No easy task” by Rafal Kuczynski mentions the changeover to International Financial Reporting Standards as a major challenge. It is also viewed as an opportunity for audit firms to review their procedures. The article informs us of the changeover and suggests gaining proper knowledge of the new standards to ensure an effective transition. As the title illustrates, it is not going to be an easy task to fully implement and use the new standards in daily practice.
Companies can learn a lesson from the European experience mentioned in the article and take the changeover as a serious task. The European experience clearly shows the process of adapting and reconfiguring information systems and updating internal controls as a critical factor in the changeover. Managers need to absorb the technical impact of standards but will also need to capture relevant data required by new standards. Companies are realizing how much work is required to make a successful changeover to IFRS. Coping with changing standards and transitional arrangements is going to be a challenge. Even though there are similarities between IFRS and GAAP, the differences need to be looked at carefully.
The significant challenges are not around the principles of the standards themselves, but more with their practical implementation including computer systems. The changes will have an effect on audit risk because of the changes in policies, configuration of systems, and maintaining internal controls. Therefore, planning is a very important step to focus on. The planning stage is the most important for this transition to be effective and avoid any errors. It should be focused on assessing and updating professionals’ knowledge and participating in the conversion process. The article mentions the failures and errors due to lack of proper knowledge and not being fully prepared for the transition. Training should be provided to cover technical, theoretical and...