Canada's Investment Community not Prepared for Changeover to IFRS: CIRI

TORONTO, Nov. 24 /CNW/ - A significant portion of the Canadian investment community is not prepared for Canada's transition to International Financial Reporting Standards (IFRS) according to the results of a members survey conducted by the Canadian Investor Relations Institute (CIRI).

Of the IR professionals responding to the CIRI poll, 50% said the investment community is not prepared for the use of IFRS, while only 8% said that investors are well educated. 

The survey results also indicate that half of the respondents are going beyond regulatory requirements to engage the investment community through a variety of communication vehicles. Communication efforts being used to reach out to the investment community include conference calls, supplemental written materials, one-on-one calls, workshops and presentations. 

"What really jumps out is the important educational role that investor relations professionals play in this transition," said Tom Enright, President and CEO of CIRI.  "Australian research shows companies that proactively provided a greater level of IFRS disclosure during their conversion to IFRS in 2005 benefitted from more accurate analyst forecasts.  Therefore, we applaud those Canadian Issuers that have provided and are planning additional communication efforts to assist the Street in understanding the impact of IFRS. I strongly encourage other companies to follow suit."

IFRS replaces existing Canadian Generally Accepted Accounting Principles for most of Canada's publicly traded companies for fiscal years beginning on or after January 1, 2011. Moving to international standards does not change the economics of a business but may present the organization's financial story in a different way. The investment community and other users of financial statements will need to be able to assess whether changes in reported results are due to the move to international standards or a real change in business performance.

The Canadian Institute of Chartered Accountants (CICA) shares the view that IFRS may not be receiving the attention it warrants among the investment community. 

"This is the time to for users of financial statements to learn about potential reporting changes arising from IFRS; and gain an understanding of what questions need to be asked in order to be able to accurately interpret IFRS financial statements," said Gordon Beal, CA, project leader for the CICA's IFRS transition strategy. "We are actively providing assistance by organizing a special conference taking place this week in Toronto and through support materials such as 'The IFRS Changeover:  A Guide for Users of Financial Reports' published earlier this year."

About CIRI
CIRI is a professional, not-for-profit association of executives responsible for communication between public corporations, investors and the financial community. CIRI is dedicated to advancing the stature and credibility of the investor relations profession and the competency of its members thereby contributing to the transparency and integrity of the Canadian capital market. With 600 members across Canada, CIRI is the world's second largest society of investor relations professionals. For further information, please visit ciri.org.

For further information:

Réjane Wilson
Senior Manager Communications & Professional Development, CIRI
[phone] x 224
[email protected]