Wednesday, May 21, 2008

IFRS Training: A process not an event

Training is an integral and key component of the IFRS implementation process spanning every level of the organization up to and including the Board of Directors. IFRS training also applies to a variety of external stakeholders as well as investors, regulators and government. It is necessary but not sufficient to provide information on the major changes between Canadian GAAP and IFRS. Training activities will be continuous over the implementation period and be incorporated explicitly in an implementation plan.

The initial awareness stage of training has started. The CICA has provided a great deal of information on its website and elsewhere. Public accounting firms have done a yeoman job in providing overview courses for clients and other interested parties. They have also provided excellent self study resources on their websites focusing on the IFRS/Canadian GAAP differences and planning considerations. Much of this information is available for specific industries in some detail derived from their affiliates in IFRS reporting countries. Accounting Associations are also presenting courses. As well there have been updates at conferences such as the FEI Canada conferences and IFRS focused conferences such as the IASB/CICA conference in April 2008. See the CICA website at

Qualified instructors who have an in depth understanding of IFRS and the differences from Canadian GAAP are in short supply. There is, however, an immediate need for training in most Canadian companies.

Initial courses are being well received but I am hearing that people want and need more. They want to start the quest for the “devils in the details” and exorcise them sooner rather than later! There is a time when the talking around the topic needs to end and the examination of details needs to start in earnest.

The next phase of training will involve intensive “hands on” tailoring to company requirements in more detail than can be provided in a general course, even perhaps those tailored to an industry. All levels of the company must be involved, not just the Finance Department (and not just the internal GAAP gurus and "IFRS aficionados” as I have called them). Major public companies with external financial reporting policy departments have started this detail process, but indications are that the involvement of senior management and the Board may have only just started. Auditors will be an integral component of the IFRS implementation team but they cannot be expected to do all of the work (similar to the SOX exercise). Unless you have in-house accounting and financial reporting experts with available time, there is a need for external help who can provide tailored training programs or research certain areas where there may be important potential differences between IFRS and Canadian GAAP.

The “hands on” approach will continue to be supplemented by industry focused courses and focus groups. There are some external suppliers also in this space but my advice is that you ask questions about Canadian content in the courses. This industry focused problem solving is strongly encouraged by the CICA.

Looking ahead, there will be a need for training for boards, for external users such as analysts, and indeed the business community in general. This type of training has not really started yet although such individuals have attended sessions at professional conferences and have undertaken self study.

It is important to understand that training is not an event but will be a continuous process through the IFRS implementation period.

The Canadian Executives Research Foundation (CFERF) issued an Executive Research Paper in April 2008, “IFRS Readiness in Canada”. The study deals with issues relating to the preparation for IFRS implementation in Canada and is a very useful reference source for the state of play, at least as at the first quarter of this year. (See page 17 for quotes from me about “Obtaining the Knowledge”). The Executive Research Paper is available as a free download on the FEI Canada website -

I will be coming back to some of the themes in the CFERF Executive Research Paper in future postings on this Blog. I welcome your comments, updates and sharing of plans for training.

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