Short-Term Changes to CPA Practices Due to IFRS

Assessing Their Likelihood and Uncovering Potential Opportunities

Michael Wilson, CPA

Created in 2009 by the AICPA, with the support of the National Association of State Boards of Accountancy (NASBA), the Blue Ribbon Panel on Private Company Financial Reporting expressed reservations about adopting IFRS for private companies in the United States. The panel consisted of members from large and small accounting firms, as well as regulators and both preparers and users of financial statements. It concluded its work in January 2011 with the release of a whitepaper that contained two major recommendations (discussed later) to the Financial Accounting Foundation (FAF). As a result, there is growing certainty that exceptions to International Accounting Standards (IAS) will be adopted for small to medium-sized companies. Such adoption could result in significant short- and long-term changes to CPA firms. The discussion below reviews the proposals of the Blue Ribbon Panel and FASB's response, and it presents a practitioner perspective on the expected effects of IFRS.