FEI Canada and Ernst & Young find manufacturing, retail and distribution
industries lag furthest behind
TORONTO, April 25 /CNW/ - The vast majority of Canada's top financial
executives don't believe their staff is prepared for the conversion to
International Financial Reporting Standards (IFRS) scheduled for 2011,
according to the IFRS Readiness - Executive Research Report. The
manufacturing, retail and distribution industries were the least prepared on
the impacts of IFRS.
The Canadian Financial Executives Research Foundation (CFERF), the
research organization of Financial Executives International Canada (FEI
Canada), co-developed the report with sponsor Ernst & Young. Survey findings
were released today at the North American International Financial Reporting
Standards Conference, in Toronto.
Five hundred and ten financial executives across Canada responded to the
survey across a range of business sectors, including mining, oil and gas,
financial services and manufacturing. Utilities lead the charge in terms of
industry preparedness; 90% said they had started assessing the impact of IFRS
conversion. This is perhaps not surprising since utilities will be one of the
sectors most significantly affected by the transition to IFRS because of how
utilities account for revenue.
While 2011 seems far away, according to the Accounting Standards Board
(AcSB), Canadian companies should be in a position to disclose their plans for
convergence in 2008. "However," says Ramona Dzinkowski, executive director of
the Canadian Financial Executives Research Foundation, the research
organization of FEI Canada, "our research shows that relatively few senior
finance executives are aware of the differences between IFRS and Canadian
GAAP, most have not briefed their audit committees, few have calculated the
costs of conversion and a majority don't yet know if their systems can handle
The report also noted large organizations are somewhat ahead of the curve
in implementing IFRS conversion teams. But that might not be enough. "When you
consider that Canadian public companies may need to disclose their plans for
convergence in their financial reporting for 2008, it becomes clear that
businesses need to start developing a sense of urgency about getting ready,"
says Rafik Greiss, partner and IFRS leader at Ernst & Young Canada. "Readiness
will not happen in one fell swoop. Early planning will help companies better
manage the pain and effort that will be involved in getting ready. The
difference between success and failure will be a well-defined plan. An ad hoc
approach won't cut it."
The conversion to IFRS by publicly accountable companies will have
significant impacts not only on financial reporting, but broader business
issues that extend across organizations and across industry sectors. CFERF's
report identifies best practices, current issues, and emerging challenges that
companies of all sizes should be aware of in converting to IFRS.
"Two concerns remain dominant among senior financial executives; resource
and time constraints, and the education and training required of staff who
will be evaluating and implementing IFRS conversion," says Michael Conway,
Chief Executive and National President of FEI Canada. "Financial executives do
not know where to turn at the moment for training."
FEI Canada and CFERF remains committed to broadening Canadian
understanding of IFRS conversion. A copy of the full report can be found at
About FEI Canada
FEI Canada is the professional membership association for senior
financial executives. With more than 2,100 members in 11 chapters across
Canada holding the title of Chief Financial Officers, Controllers, Treasurers,
Tax Executives, Finance and Accounting Professors, the association membership
represents a significant number of Canada's leading and most influential
corporations. Further information can be found at www.feicanada.org.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and
advisory services. Worldwide, our 130,000 people are united by our shared
values and an unwavering commitment to quality. We make a difference by
helping our people, our clients and our wider communities achieve potential.
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