If any CPA in South Carolina has shouted loud and long for our profession to think global (my international tax niche), it has been me. In 2009 I gave a one hour presentation at the SCACPA PIUs around the state in an attempt to alert South Carolina CPAs to the elementary but key components of international tax, the absence of which could create penalties for our clients. At our AICPA Council meetings I find it interesting to hear about the developments of IFRS relative to US reporting. And I must admit (confess) that I almost echoed a comment I heard from a managing partner in our state who said he planned to retire before IFRS was implemented in the US. So perhaps those of us nearing retirement can sit back and hand this issue off to the next generation of accountants. WRONG!!!!!!!
I have just finished two days of grunt work trying to satisfy a German auditor. We completed audited financial statements a month ago for a US subsidiary who had their first audit on their 2009 financial statements. Of course our staff prepared all the right engagement, planning and audit workpapers. We got the appropriate management representation letters. We prepared the file and I must honestly say that I hope that our Peer Reviewer will select that file, as I am very comfortable with the workpapers and the financial statements.
But then, out of nowhere, we received a request from the German auditor who was preparing consolidated European financial statements. And guess which method of accounting, auditing and reporting they were using. Yes. IFRS. They wanted me to sign certain statements confirming that we were independent and following the appropriate ethics in accordance with IFRS standards. So much for waiting for retirement and passing this on to the next generation. Fortunately though, the IFRS Code of Ethics is only 98 pages and our firm was not in violation. Whew!
Perhaps many of my peers in South Carolina have had similar experiences. Since we live in such a global economic environment, totally ignoring IFRS and maintaining quality clients is just not an option. While I am familiar with the IFRS developments of the AICPA and the limited IFRS activity of the SEC, I cannot ignore these standards and deem them to be like the metric system – something the rest of the world can use, while America has its own system of measurement.
Blogger: Charles ‘Eddie’ Brown, CPA