March 17, 2008
California Society of Certified Public Accountants
Announces Education Initiative Covering
International Financial Reporting Standards
REDWOOD CITY, Calif. -- The California Society of Certified Public Accountants (CalCPA) today announced an educational initiative for their members that supports global convergence of accounting standards.
The initiative follows a U.S. Securities and Exchange Commission (SEC) decision to allow foreign registrants to file under International Financial Reporting Standards (IFRS) without needing to reconcile to U.S. generally accepted accounting principles (GAAP). The SEC also is considering allowing U.S. companies to use IFRS.
The U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working together to achieve convergence in accounting standards as defined by the 2006 Memorandum of Understanding (MoU) with a shared goal of developing high quality, common accounting standards for use in the world’s financial markets.
Almost 100 countries now either require or permit the use of IFRS for the preparation of financial statements by their domestic listed companies. Under a regulation adopted in 2002, the European Union required its listed companies to report using endorsed IFRS beginning in 2005. Japan's accounting standard setter and the IASB have agreed to work to accelerate convergence between Japanese accounting standards and IFRS, with certain interim target dates in 2008 and 2011.
Other countries, such as China, Israel and India, have either begun to move toward use of IFRS (China and Israel) or have announced plans to do so (India). Canada has announced plans to move to IFRS reporting around 2011, and Mexico is working to incorporate IFRS aligned content into Mexican accounting standards.
CalCPA is working to create educational programs and resources with the support of the International Accounting Standards Committee Foundation. Both member organizations believe that common global financial reporting across the major business and capital markets of the world is a critical component in providing credible, comparable, conceptually sound and usable financial information to help investors worldwide and promote greater investments in the capital markets.
“CalCPA represents more than 31,000 CPAs in California -- many serve public companies as executives, external auditors or consultants -- which is almost one-tenth of all CPAs in the United States,” said Loretta Doon, CPA, CEO of CalCPA. “It is our goal to make sure that our members understand the impact of international convergence in accounting standards and our duty to ensure that CalCPA provides them with the proper education. This initiative, supported by the IASC Foundation (the parent body of the IASB) helps us accomplish both of these.”
As part of the relationship, the IASC Foundation will make available to CalCPA members information about recent developments related to their efforts with the IASB to achieve convergence between U.S. GAAP and IFRS. In addition, a CalCPA Web resource center will be developed to help California CPAs better understand global convergence and IFRS. This website can be accessed at www.calcpa.org/ifrs.
“A single set of high-quality, comprehensive accounting standards will help investors by moving to more transparent and comparable financial reports throughout the world to support the capital markets,” added Ms. Doon. “This educational initiative will better prepare our members involved in the development of financial reports of public companies used by millions of investors worldwide.”
In July 2007, the Securities and Exchange Commission proposed to allow foreign private issuers to file using IFRS, as promulgated by the International Accounting Standards Board, without reconciling to U.S. generally accepted accounting principles (GAAP) as they are now required to do. This action comes in response to a move by much of the rest of the world to shift to IFRS.
In November 2007, the American Institute of Certified Public Accountants (AICPA) recommended the U.S. Securities and Exchange Commission (SEC) take comprehensive steps to harmonize U.S. and international financial reporting, including allowing American public companies to report financial results using international accounting standards. The SEC is weighing whether to allow U.S. firms to report financial results using IFRS rather than U.S. generally accepted accounting principles (GAAP).
About CalCPA
The California Society of Certified Public Accountants (CalCPA) (www.calcpa.org) is the nation’s largest state accounting organization. It serves more than 31,000 members in public practice, private industry, education and government.
About International Accounting Standards Committee (IASC) Foundation
The International Accounting Standards Committee (IASC) Foundation is an independent body that oversees the International Accounting Standards Board (IASB). The Foundation, through the IASB, is committed to developing, in the public interest, a single set of high quality, understandable and enforceable global accounting standards (known as IFRS) that require transparent and comparable information in general purpose financial statements. In addition, the IASB co-operates with accounting standard-setters to achieve convergence in accounting standards around the world. The governance of the organization rests with 22 Trustees. Six of the Trustees must be selected from the Asia/Oceania region, six from Europe, six from North America, and four from any region. The Foundation is funded by contributions from the major accounting firms, private financial institutions and industrial companies throughout the world, central and development banks, and other international and professional organizations.
