Teaching IFRS to Tomorrow's Accountants

Lora Bentley spoke with Charles Bame-Aldred, an accounting professor at Northeastern University.

Bentley: I've read that colleges and universities aren't doing much to add International Financial Reporting Standards to their accounting curricula yet because it's not required and it's not on the CPA exam. Would you agree, or is there something else?

Bame-Aldred: Yes... and [in a recent CFO.com article] one of the SEC folks said they weren't going to go through the process of training people until they know this is going to happen for certain because then you end up losing some of that educational benefit because people forget. So there is some hesitancy to do it right away.

Bentley: When it does happen, how will the process look?

Bame-Aldred: There's a couple things that may occur. And again, this is just my speculation. I have no idea. This is just reading the tea leaves, but it's quite possible that you'll have both IFRS and U.S. GAAP existing simultaneously. You'll have GAAP maybe used in private companies and IFRS in public companies. Unless they make a requirement, people are going to do whatever is going to be what they're used to and also what's less costly. If I have to go through and change systems, retrain people, I'm not going to do that if there's no incremental benefit. Especially since public companies just went through all of the hoops to comply with Sarbanes-Oxley section 404. They may be looking and saying, "Did we really get any benefit out of that requirement?" We just don't know, but unless they make it a requirement, we may see these things coexisting.

Bentley: So what will the change require from an academic perspective?

Bame-Aldred: One of the great things about accounting academics is they're very adaptable, in my opinion. Every time there's a new pronouncement coming out, they're ready to take care of it. They're ready to make sure that information gets in the hands of our students. With IFRS, we're not changing the way we do basic accounting; we're changing the way we're reporting things. Accounting academics know how to report things in a variety of different ways. Nothing in IFRS is that groundbreaking that you would say, "Wow — that's a completely new way to do things!" It's either fair value, or it's not fair value. You get to recapture things, or you don't get to recapture things. You don't get to do LIFO; you do get to do LIFO. It's just a matter of what are the changes, and then put those changes into our curriculum.

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