First batch of IFRS graduates only ready in 2011

The first class of IFRS students will only graduate in 2011 – in the same year that the SEC will consider whether to move forward with the adoption of international standards.

The estimate was given by 30% of 535 professors surveyed by the American Accounting Association and KPMG, who also thought that only 17% of the 2010 class will be competent in IFRS.

The US has to catch up with Europe – which first implemented IFRS in 2005 – and will also have to find ways of working around challenges which include a lack of textbooks before the 2010-2011 academic year.

In the survey, which was conducted in July and August, only 22% of the professors indicated that they can incorporate IFRS into curricula this year in any significant way. Sixty-two percent said that they have not taken any significant action steps.

'This is a major undertaking for universities, and it is not surprising to find professors weighing their options,' said Philip Reckers, vice-president of AAA's Professional Advisory Board and accountancy professor at Arizona's W. P. Carey School of Business.

'Part of the challenge for professors is to make sure that their upperclassmen have some knowledge of IFRS before they leave campus, and therefore they are likely in the early phases to focus in the areas of intermediate and advanced accounting,' he said.

The survey also showed that university administrations do not truly understand and appreciate the significant change needed to incorporate IFRS into a curriculum and could contribute to impeding rapid advancement of the curriculum.

Only 23% of the professors indicated that the administrators responsible for allocating resources understand the change very well while another 30% say that the administrators have some understanding, and a further 38% said that they have little or no understanding of the effort needed to make the change.

KPMG’s national managing partner of university relations, Manny Fernandez, and recruiting said it is imperative that professors take the time to educate administrators on the overall impact of IFRS in business and present a needs assessment for their department and curricula.

'There is no doubt that the early movers in incorporating IFRS into the curricula are those that have adequately informed university leadership, and it will be those schools that will be more successful in building their brands in recruiting students,' said Fernandez.

Other survey findings:

• 89% believe textbooks to be the highest priority.

• As to when they felt the CPA exam would include a comprehensive coverage of IFRS, 34% indicated 2011 followed by 29% who said 2012.

• In incorporating IFRS into their curricula once it becomes an acceptable reporting framework for U.S. companies, 56% of the professors said they will focus on comparing and contrasting IFRS and U.S. GAAP standards and 37% said they would compare and contrast IFRS and U.S. GAAP foundational concepts; 26% expressed that they will teach IFRS standards and conceptual framework only. Many others, 33%, were undecided.

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