Accounting faculty at universities throughout the United States believe their students and the U.S. economy will be at a disadvantage if U.S. regulators do not adopt a set of globally accepted accounting standards and if universities do not take immediate steps to incorporate International Financial Reporting Standards (IFRS) into U.S. accounting curricula. This is according to a survey conducted by the American Accounting Association (AAA) and KPMG LLP, the audit, tax and advisory firm.

 

The second annual KPMG-AAA Faculty Survey, conducted during July and August 2009, showed that nearly half of the 500 professors who responded believe the United States should transition to IFRS to remain competitive, and three-quarters think IFRS needs to be immediately incorporated into their school’s curricula.

 

Half of the professors responding to the survey said they thought a low sense of urgency exists among U.S. regulators to adopt IFRS by a “date certain,” while only 16 percent thought regulators had a high sense of urgency. 

 

Seventy-four percent of respondents said that U.S. adoption of IFRS will occur through convergence of U.S. GAAP (Generally Accepted Accounting Principles) with IFRS by 2015 or later. Meanwhile, 17 percent think U.S. public companies will be required to adopt IFRS outright by 2015 or earlier.  Nine percent think IFRS will not be adopted by U.S. companies.

 

Most Significant Challenges 

The KPMG-AAA Faculty Survey found that seven in ten professors said their most significant challenge to teaching IFRS is making room for it in the curriculum (This is in contrast to last year’s survey where respondents cited developing curriculum materials as the top challenge).  Despite this challenge, 70 percent said they have taken significant steps to incorporate IFRS into the curriculum.  Further, 83 percent believe IFRS needs to be incorporated into their curricula by 2011. 

 

“University professors throughout the United States recognize that teaching IFRS is critical in preparing our accounting students to excel in the global marketplace and finding space to fit IFRS in the curriculum is the challenge," said Manny Fernandez, KPMG's National Managing Partner, University Relations and Recruiting. “Not surprisingly, nine out of ten professors surveyed by KPMG and the AAA believe it is very important to teach IFRS to U.S. students.”

 

When asked to assess their university’s preparedness to teach IFRS, only a small fraction (eight percent) thought at least half of their school’s accounting faculty were qualified to teach it.  Slightly more than half of the professors (55 percent) were also concerned that administrators do not understand the magnitude of the curriculum change required to respond to IFRS adoption in the United States. 

 

“The findings of the KPMG-AAA survey suggest that we have made progress, but there is still much work to be done in optimizing how IFRS is taught in our university classrooms,” said Philip M. J. Reckers, Ph.D., recent Chair of the American Accounting Association’s Education Committee and Professor of Accountancy at Arizona State University’s W. P. Carey School of Business. “Professors, university administrators, regulators and thought leaders in the accounting profession need to work together to make sure the curricula is timely and relevant.”

 

Other key survey findings:

IFRS Timeline

 

In November 2008 the U.S. Securities and Exchange Commission issued a proposed “roadmap” for a potential transition to IFRS, under which the agency would consider in 2011 whether to require all public companies to adopt IFRS on a phased-in basis from 2014-16.  However, in January 2009 newly appointed SEC Chairman Mary Schapiro expressed concerns regarding the proposed IFRS roadmap. In June 2009 President Obama recommended that the Financial Accounting Standards Board, International Accounting Standards Board and the SEC make substantial progress towards a single set of global accounting standards by the end of 2009.  More recently, Chairman Schapiro and SEC Chief Accountant James Kroeker have indicated that the SEC will again be considering the issue in the fall of 2009.

 

For a summary of the 2009 KPMG-AAA Survey or to view last year’s survey summary, please visit:  www.kpmgfacultyportal.com