The transition in global reporting
International Financial Reporting Standards (IFRS) Reporting

Global Reporting and Fraud Opportunities
Not only the challenges it represents but also its complexity and impact on others departments within organizations coupled with time pressure, the IFRS foster fraud risks. Countries applying the global regulations are under increasing need of proactive fraud deterrents. Some of the aspects relevant to this transition that could lead to greater instances of fraud are: faster revenue and accounts receivable recognition, changes in accounting for assets where they are subject to mark-downs as well as accounting for leases. It seems that opportunities are readily available for management fraud in addition to the conditions that undermine the quality of information such as error for lack of training, loss of data, improper oversight.
The situation is getting out of control which in turn means greater opportunities for forensic accountants. For example, some professional organizations are suggesting the need for building a zero tolerance culture as a deterrent to economic crimes. The importance of corporate governance is being highlighted by prompting organizations to develop, implement, monitor stronger internal controls with the purpose of bridging the gap between what is perceived and what is a reality.
Regardless of when or how we get there, it is expected that the United States will eventually join the more than 100 countries that have adopted International Financial Reporting Standards.
The U.S. Securities and Exchange Commission's proposed Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers, released to the public last November, outlines an adoption date for U.S. public companies of 2014, 2015 or 2016, depending on the size of the issuer.
Financial reporting in the United States is being influenced by International Financial Reporting Standards (IFRS). IFRS reporting considerations are already impacting business decisions, and not simply through non-US subsidiaries. The SEC is considering measures that could lead to retiring US GAAP and adopting IFRS in the US. The effects of global reporting standards on US companies will accelerate over the next few years, regardless of how the SEC proceeds. Understanding IFRS and its implications is a business imperative for US companies. Take advantage of the resources that PwC has developed to increase your knowledge
The Journal of Accounting in its January 2009 Edition, included an interview with SchapiroWhen asked by committee Chairman Sen. Chris Dodd, D-Conn., about whether she would support certain actions that would help detect fraud such as the alleged Ponzi scheme run by Bernard L. Madoff Investment Securities LLC, Schapiro said she would move quickly to create a new process for handling tips and whistleblower complaints received by the agency. Schapiro said she would centralize the process under one point of contact and staff it to ensure intelligence received is properly examined and tracked.

Schapiro also indicated that there may be a need to expand the authority of the PCAOB. Her comments related to a PCAOB announcement regarding the registration of all broker-dealers and whether the PCAOB has the authority to inspect such registered CPAs if they do not audit issuers.

In response to a question regarding IFRS, Schapiro said she has concerns with the SEC’s current road map for transitioning U.S. public companies to IFRS.

“I will take a big deep breath and look at this entire area again carefully and will not necessarily feel bound by the existing road map that’s out for comment,” Schapiro said.

Schapiro highlighted her concerns about a lack of consistency in the application of IFRS, the cost for U.S. companies to switch to IFRS from U.S. GAAP and the independence of the International Accounting Standards Board, which she called her “greatest concern” about IFRS.