US GAAP to IFRS Migration: Reframing the Debate

For a decade or so, there has been quite a lot of talk in the US about a possible transition from US GAAP (Generally Accepted Accounting Principles) to IFRS (International Reporting Standards) with regard to US publicly traded companies. Up to this point, most of the discussions on the subject have been about assessing the merits of such a change. As usual, some people are for it while others aren't. Because I am still in the process of gathering the facts on the possible ramifications of the adoption or non-adoption of IFRS by the SEC (US securities and Exchange Commission), I find myself incapable of formulating an opinion on this issue. There is however plenty of literature about the subject available online therefore I urge you to conduct your own investigation. From the little I have learned so far, it is no longer a matter of if but when the SEC will require US publicly traded companies to report under IFRS. I am saying this because the American Institute of Certified Public Accounting announced not too long ago that starting with the year 2011, the CPA exam will test the candidate's knowledge on IFRS and IAS (International Auditing Standards). What would be the purpose of incorporating IFRS and IAS content into the uniform CPA exam if IFRS and IAS were not actually going to be widely or selectively implemented in the US? The debate we should be having right at this moment is how to best prepare accounting professionals and college students majoring in accounting in order to ensure a smooth transition from US GAAP to IFRS. This debate is critical because without adequately trained accounting professionals, the migration from US GAAP to IFRS is going to be a total disaster. Two Big Four accounting firms Deloitte and Ernst & Young have independently created partnerships with a select number of universities in order to develop teaching materials to aid instructors and professors in incorporating the differences between U.S. GAAP and IFRS into intermediate accounting courses. Although I salute those initiatives, I believe that more needs to be done. In my opinion, every higher education institution offering accounting degrees ought to, without further delay, start reengineering its curricula in anticipation of the ineluctable adoption of IFRS by the SEC. Right at this moment, it will indeed pay more to adopt an anticipatory attitude rather than a reactionary one. Furthermore, every accounting department's advisory board shall make it a top priority that IFRS is no longer vaguely talked about but rather taught in classrooms' settings. Last but not least , college accounting textbooks publishers and their respective authors must work hand in hand in order to quickly bring to market comprehensibly updated study materials that fully incorporate IFRS. Because mankind is a creature of habits, I thus understand that we have a certain tendency to resist the idea of change. However, one can no longer ignore the fact that the SEC is moving inexorably towards the adoption of IFRS. Therefore, all potentially affected parties must work in concert with each other to ensure that today's and tomorrow's US accounting professionals are more than appropriately prepared to deal with the much anticipated SEC migration from US GAAP to IFRS.

Suggested reading:

1. International Financial Reporting Standards: An AICPA Backgrounder
   
2. Content and Skill Specifications for the Uniform CPA Examination
   
3. University Professors Weigh In on IFRS Curricula
   
4. Is it US GAAP IFRS at US Universities?
   
5. Deloitte Puts IFRS in College Classrooms
   
6. E & Y Launches Academic Center