ACCA Chief Executive calls for revamp of IFRS standards
Allen Blewitt, Chief Executive of ACCA (the Association of Chartered Certified Accountants) today warned that implementation of, and compliance with, International Financial Reporting Standards would be adversely impacted unless the standards were made less complex.
Speaking at a conference in London, Blewitt asserted his enthusiasm for the IFRS process, but said the International Accounting Standards Board needed to instigate a 'shift in emphasis' towards the concerns of countries who were trying to adapt IFRS to their national circumstances and to help smaller, non-listed companies.
Blewitt said: "What I believe the IASB most urgently needs to address are the barriers to implementation. From talking to our members working in business around the world, it is clear that the length of the standards and complexity of the concepts represent a very real problem in many countries. The standards have been described to me as a major turn-off and disincentive for accountants in commerce and industry. People who initially qualified as accountants and are now principals and managing directors resent that they can no longer understand the accounts of the business that they helped to build."
Blewitt said the fact that IFRS had essentially been designed for listed companies and were not appropriate for the great majority of businesses meant that the IASB's 'Small and Medium-Sized Enterprise' project was urgently needed.
But he warned: "I am concerned that, despite the name of the project, the focus of IASB's considerations are going to be large unlisted entities. The overwhelming need for a new set of standards is not for these few companies but for the much larger numbers of genuine SMEs. If the IASB fails to satisfy this real and urgent demand that exists around the world, then some other body must step in and deal with the real problem."
Blewitt also raised the problem of translation of the standards in many countries where English is not dominant.
He said: "What is needed is highly sophisticated translators with good knowledge of language as well as technical accounting concept. Such people are rare. This is compounded in the standard setting process when there is a short period of time between exposure draft and finalisation. This does not give sufficient time for those countries where translation is required to first complete the translation, then disseminate the exposure drafts and finally synthesise a response. Global standard setting will have to grapple with these issues if it is to be ultimately credible, beyond the largest entities."