by :Chelsey Levingston
International Financial Reporting Standards (IFRS) should be a concern of current accounting students.
“When accounting students graduate, they’ll have to be familiar with the direction business is going,” said James Greenspan, Ph.D., professor and chair of accountancy.
And it looks like the direction is IFRS.
Under consideration by the Securities and Exchange Commission (SEC), if the SEC votes to move U.S.-listed companies from U.S. Generally Accepted Accounting Principles (GAAP) to IFRS, the results will be a more level playing field for businesses worldwide.
Already, more than 100 countries require or permit use of the international standards, according to “Buckle Up”, a report by Deloitte, the parent company of 165,000 audit, consulting, financial advisory, risk management and tax service firms.
When the SEC decides whether or not to go forward, the target date for the International Accounting Standards Board (IASB), the standard setting body for IFRS, and the Financial Accounting Standards Board (FASB), the standard setting body for U.S. GAAP, to converge is 2011, according to the SEC timetable issued Nov. 14, 2008.
Mandatory use of IFRS is likely to start in 2014, according to the Deloitte report.
IFRS questions are expected to start appearing on the CPA exam in 2013, according to the American Institute of Public Accountants.
“This is why students should be concerned,” said Kate Lash, a junior majoring in accountancy and president of Accounting Club. “Questions could appear on the CPA soon after current students graduate.”
She also said as far as jobs, it’s likely students will be trained appropriately.
“WSU is taking the necessary measures,” Lash added.
“I am concerned. In my undergraduate, we haven’t hardly heard of IFRS,” Lash said.
So it’s hard to know if one graduating class will be more affected than another, said Greenspan. However, with the change in the presidential administration and the new SEC chair, Mary Schapiro, there could be a new transition pace, he said.
“We know it’s going to be coming sooner or later, but we don’t know the pace,” Greenspan said.
Instead of waiting on the SEC to set the pace, the role of universities is to be at the cutting edge, said the accounting chair. That’s why education is so expensive.
“I think our role as professors is to always make sure we teach what’s current now and what will be current when students graduate,” Greenspan said.
Knowing the switch to IFRS will happen, the accounting department met fall 2008 and targeted fall 2009 to start incorporating the new standards in the classroom.
A reason for the education lag is it takes three years to get new textbooks written and published, according to Strategic Finance.
But IFRS has been addressed in the masters of accountancy program the last two or three years, Greenspan added.
One professor hasn’t waited on textbooks.
Currently teaching international accounting, Neal Pemberton, an accountancy adjunct faculty member, said students won’t have to relearn accounting, but understand the differences between GAAP and IFRS because they’re built on common concepts.
International accounting, open to all business majors, has kept up with IFRS developments the last two years and covers current events, but doesn’t cover IFRS accounting practices.
Knowledge of IFRS could increase a student’s marketability and become an opportunity for accounting professionals and students, he added.
“It’s going to impact their career development, so they’re going to have to stay current,” Pemberton said.
At University of Dayton, IFRS is being covered and tested in intermediate accounting courses and international accounting courses, said Donna Street, president of the International Association for Accounting Education and Research and Mahrt Chair of Accounting at the University of Dayton, Ph.D.
In general, many U.S. professors lack IFRS expertise and textbooks, but large accounting firms are making materials and cases available, said Street.
For example, Street uses electronic materials in her classroom from the International Association of Accounting Education and Research.
The University of Dayton School of Business Administration also started a pilot IFRS certificate program Monday, Jan. 26 at U.D. in cooperation with the Institute of Chartered Accountants in England and Wales.
Upon program completion, students sit for an online exam to earn the certificate.
Street will be teaching another international course this summer, which also includes a two-week trip to the partner school and site visits in England.
“The big firms are already training their staff. The universities are the problem,” Street said.
Professors and students graduating this year can get continuing education and CPA courses online.
The Accounting Club, about 25 to 30 students, meets at least once a quarter and gives the opportunity to learn and network with speakers, Lash said.
Greenspan said, “I think IFRS is sort of a signal that if you don’t make yourself more familiar with the way other countries do things or if you don’t get a more global prospective, you’re going to be in trouble.”
source: The Guardian
