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Are financial professionals ready for IFRS?: An exploratory study

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  • Bierstaker, James L.
  • Kopp, Lori S.
  • Lombardi, Danielle R.

Abstract

Despite a move towards convergence between principles-based International Financial Reporting Standards (IFRS) and rules-based U.S. GAAP, and the likelihood that many foreign affiliates of U.S. firms use IFRS, little research has examined whether United States financial managers appropriately record and summarize transactions in accordance with IFRS. This paper investigates the ability of 176 U.S. financial managers to appropriately apply the revenue recognition standard under IFRS when given the relevant guidance. About half of the participants selected the U.S. GAAP answer, and only 40 percent identified the correct answer under IFRS. More experienced financial managers, and financial managers with relevant industry experience were more likely to appropriately apply the standard, but a substantial percentage of them still selected the GAAP choice rather than the correct choice under IFRS. This suggests that more IFRS training in the U.S. is needed prior to IFRS adoption.

Suggested Citation

  • Bierstaker, James L. & Kopp, Lori S. & Lombardi, Danielle R., 2016. "Are financial professionals ready for IFRS?: An exploratory study," Advances in accounting, Elsevier, vol. 35(C), pages 1-7.
    • Handle: RePEc:eee:advacc:v:35:y:2016:i:c:p:1-7
    DOI: 10.1016/j.adiac.2016.04.004
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    References listed on IDEAS

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    Cited by:

    1. Maradona, Agus Fredy & Chand, Parmod, 2018. "The Pathway of Transition to International Financial Reporting Standards (IFRS) in Developing Countries: Evidence from Indonesia," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 30(C), pages 57-68.
    2. Jerzy Gierusz & Katarzyna Kolesnik & Sylwia Silska Gembka, 2019. "The Interpretation of "in Context" Verbal Probability Expressions Used in International Financial Reporting Standards - Evidence from Poland," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2019(1), pages 25-45.

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