Senior execs still battling with new standards

News Article - 17 July 2006
Category: Regulatory

Senior executives at UK companies are still failing to understand reporting changes under new international accounting standards, a survey has revealed.

According to the PricewaterhouseCoopers (PwC) study, one in six finance directors describe the understanding their board has of the International Financial Reporting Standards (IFRS) as "poor" or "very poor".

The vast majority of executives questioned also said that they found it more difficult to explain their results under IFRS compared to UK GAAP.

"UK listed companies have been through a tough change," said Ian Dilks, IFRS conversion leader at PwC.

"However, many finance directors currently seem to be concerned that the cost and complexity of producing IFRS accounts exceed the benefits."

Half of those involved in the study said that the effects of IFRS had not had an impact on their decision making, with 40 per cent even saying that it was unhelpful.

A quarter of finance executives said that it had influenced business decisions, particularly over mergers and acquisitions.

Mr Dilks added: "Their expectation that a major benefit of the new standards would be international comparability is matched by concerns over complexity and increased volatility in reported earnings."

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