Small Firms and IFRS

Source: Public Practice

Following are excerpts from an article entitled “Small Firms Can Meet Clients’ Needs in the IFRS Environment,” by James Metzler, CPA, AICPA Vice President—Small Firm Interests:

Recently, the Securities and Exchange Commission announced it is proposing ………a timeline to continue progress toward adoption of IFRS by U.S. public companies. Private companies will probably also face adoption of IFRS in an effort to internationalize their businesses.

Even the smallest companies are increasingly doing business in the global marketplace. ……it’s expected that half of U.S. small businesses will be involved in international trade in the next 10 years.

CPAs who understand IFRS will position their firms to seize these new opportunities.

Now is the time to begin…….conversations about international business ventures with your clients. The conversation should begin with…..probing questions…… such as:

• What sales opportunities exist for your products/service outside the U.S.?
• What supplier and outsourcing opportunities are there for your business outside the U.S.?
• What are the merger opportunities?
• If you had a capital source outside the U.S. to expand, what successes do you envision?

Then the discussion can move to the financial reporting and where it is headed. Let them know that……IFRS …… standards could bring benefits that would help make international business easier even for the smallest of businesses. Talk about how the economies of standardization of the financial reporting process would mitigate having to bear additional accounting fees from having statements prepared under two different methods. If the client asks about the differences, it only makes sense to describe the general differences that may apply specifically to their business, such as LIFO or fixed assets differences.

Firms may also want to consider providing clients with a copy of the AICPA IFRS Backgrounder, available online from www.IFRS.com.

For the complete article, click here.

From Texas Society of CPAs, Public Practice, November/December 2008, www.tscpa.org.