Kula Consulting Blog

I hate to be an alarmist, but did anyone notice that the SEC agreed to let foreign companies file their reports under International Accounting Standards?

Plus, three years from now, US companies will be able to elect to file using international instead of US GAAP.  What happened, why and what could it mean to us accounting-types?

I’m just a poor ole country recruiter, but whenever the “govment” makes a major change I’ve found that it isn’t always a good thing for the governed.  I have started to call some folks I know (that’s what recruiters do), and do some reading to try and find some answers.

Here’s what I’ve learned so far:

Foreign companies should save $3+ billion by not having to conform to GAAP. The savings would come from lower accounting and legal expenses.

The FASB would become a non-entity over time.  If the goal is to have one global set of accounting and financial reporting standards, then the FASB would give way to IFRS.

Most accounting professionals will need to be re-trained.  Understanding international accounting standards will become a significantly valuable skill-set for future employment.

My big question is: Will exempt-level accounting and finance jobs be outsourced?  Will we see a similar scenario within accounting as we saw in software development outsourcing?

The SEC will allow US companies to file reports under international accounting standards within three years.  Since the international standards are “principals-based” versus “rules-based” standards, will we see a return to more creative accounting treatments?  Will lawsuits over accounting treatment issues increase?

And finally, when accounting standards become global will the financial auditing firms (Big 4) face significant competition from offshore accounting firms?  And, if so, what will be the impact on the accounting profession and job market?

I think we are all in for some profound changes in our work lives due to these changes.  Some will be perceived as opportunities and some will be challenges, but, we all will be impacted by this change.

Here are a few links to additional information about this subject, if you are interested in learning more:
1.  The SEC & IFRS:  http://www.cfo.com/article.cfm/10159708/c_3395216
2.  The Dark Side of IFRS & GAAP:  http://www.cfo.com/article.cfm/10131891/2/c_3395216?f=insidecfo

What do you all think?

Oh, and stay tuned for our upcoming teleseminar on this very subject!

Rich