IFRS: What should boards and audit committees be ... - IAS Plus

––What steps are being taken to educate theorganization? Generally, training that is timely andspecific to individual needs yields the greatest benefit.If training is too general and too early, informationlearned may not be retained. Timely education for theboard and its committees is also important. BuildingIFRS proficiency will enhance board members’ abilityto lead productive dialog and provide useful insights inIFRS planning discussions.• Focus on the process. Both the board and auditcommittee members should focus early on in overseeingthe company’s approach, timeline, and budget fortransition. The amount of time companies have toprepare may be less than many would expect, and athoughtful approach to conversion can help to controlcosts. Encourage management to consider short- andlong-term planning issues in determining what thecompany needs to do now versus later. Be mindful ofopportunities in the IFRS conversion process that couldtranslate into longer-term benefits.Key questions to consider raising with managementinclude:––Has a PMO been established? A dedicatedproject management office provides a single pointof coordination that can help companies adhere to aunified plan by: establishing milestones and monitoringperformance against them; facilitating a globallyconsistent application of IFRS; fostering the creation ofand deploying standard templates; and coordinatingtraining activities.––Is management taking a fresh look at policies?IFRS provides an opportunity to refresh accountingpolicy implementation, with a focus on achievinggreater transparency and more timely financialreporting. (See Appendix, “Issues Guide,” for a moredetailed view of key IFRS/U.S. GAAP differences.)––Is the company monitoring evolving standards?The Financial Accounting Standards Board (FASB) andthe International Accounting Standards Board (IASB)are working toward convergence of their standards.There are currently several active projects, some ofwhich may result in significant impacts. While a goalof the projects is to achieve full convergence, somedifferences may remain upon their completion. Whena company adopts a new U.S. GAAP standard, itshould also be considering the related IFRS standard,and addressing the impact of the differences thatremain between the two standards. Managementshould also consider anticipated changes related to theconvergence agenda—and incorporate those into anylong-term plan.––Will the company be ready by the transitiondate? Under the SEC’s proposed Roadmap, largeaccelerated filers would be required to file their 2014financial statements using IFRS, along with comparativefinancial statements for 2013 and 2012. For suchcompanies, this would mean an adoption date ofDecember 31, 2014, with a transition date of January1, 2012. To efficiently and properly transition to IFRS,it is advisable to run parallel IFRS and U.S. GAAPreporting, and this would mean finalizing the beginningbalance sheet by the transition date.–Is the independent auditor involved?– The earlyand continued involvement of the independentauditor can prevent future surprises and can providemanagement with a well-informed source of assistancethat has a deep knowledge of the company.IFRS: What should boards and audit committees be considering now? 7