Sunday, May 18, 2008

Finding the devils in the details

There has been a lot of discussion in the Canadian accounting community over the last few years about the move from Canadian GAAP to International Financial Standards (IFRS). However, there is recent evidence that a good many companies have not really started their implementation in earnest. They have not started to find the devils yet. A recent Canadian Financial Executives Research Foundation (CFERF) Executive Research Paper "IFRS Readiness in Canada" discusses the state of (lack of?) preparation for the IFRS implementation in Canada. (More details can be found on the FEI website The study was sponsored by Ernst & Young in Canada. I will be picking up some of the themes from the Executive Research Paper in future postings.

Some people have been surprised by the current status of IFRS implementation. We should not be surprised since financial managers have been dealing with a multitude of issues over the last few years. Sarbanes Oxley (SOX) and the Canadian requirements on internal controls is only one. Other issues have included the BIS Capital Adequacy requirements for banks, Asset Backed Commercial Paper, and the fall out from the rapid appreciation of the Canadian dollar are among others. The life of the CFO is a really busy one - I know.

Unless you came to this site thinking it is some discussion on a new occult group - "The Devil" you know or rather you do not know - you most probably know that the CICA has mandated a move to IFRS and has issued a 2400+ page exposure draft of the IFRS detailed standards. (The exposure draft can be downloaded for free on the CICA website - have a lot of ink in your printer if you want a hard copy). I will deal with some aspects of this in future postings. Just reading the document seems a daunting task even for IFRS afficionados. Somehow we must all get a grasp on this. Financial Reporting was my first love a very long time ago. I had a very interesting stint at the CICA in Accounting Research in the early days. Accounting Policy was not "sexy" in those days not like a "real" job?

The purpose of this Blog is to explore the devils in the details in IFRS implementation in Canada. I will look at creating awareness, finding the devils and dealing with them. I have called the process of dealing with them "exorcism" and I have called myself "The IFRS Exorcist" somewhat tongue in cheek. We all of us are virtually certain that there will be devils in the details and some of them may be hiding in places where we least expect them!

Please have patience with me on this project. Some of my associates have said that I have stepped in where angels fear to tread. You know what that would make me? My blogging experience to date has been posting on other Blogs. It has been fun in particular to comment on the US primaries. It may take a while to iron out the process. In the next post I will set out some rules for responsible blogging here. Comments are always welcome.

This is a forum to express views and information and to share experiences. Do not look to it for final opinions to be used as a technical reference. Look to it to provide "grist for the mill".

Good Luck and Bon Voyage to us all!

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