Corporate governance
March 08, 2010
Reporting standards convergence ‘crucial’
Sanchia Temkin
Business Day
The convergence of International Financial Reporting Standards (IFRS) is crucial to investor and financial stability, according to a new global study released last week by the International Federation of Accountants (Ifac). The latest survey of 157 accountancy organisations in 123 countries found that the adoption, implementation and enforcement of IFRS is vital as investors need clear, reliable, consistent data. Company presidents and CEs said the Ifac needed to continue to lead the convergence of standards developed by its independent boards, relating to auditing and assurance, education, ethics and public sector accounting, and to support their implementation.
Sue Ludolph, project director of accounting at the South African Institute of Chartered Accountants (Saica), said: “Saica is fully supportive of the Ifac’s survey of the global accountancy profession in November 2009.
“The survey provides a useful reference to align South African priorities with those of the rest of the world. It contains no surprises and reinforces our choice of focus areas.”
Ludolph said the convergence or adoption of IFRS by US firms would be helpful since some of the urgent need for financial asset reclassifications arose because reclassifications were available in US Generally Accepted Accounting Practice and not in IFRS.
“Reporting standards arbitrage leads to confusion and opportunities for abuse. Efficiency of capital markets will be improved by a single set of global standards,” she said.
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