Describe the process that your selected country went through to adopt IFRS, such as how long it took for the country to

Read “New IASB Leader Embraces Challenges” which can be accessed through the DeVry online library. Choose a country that has already adopted IFRS. In 2-3 pages (12-pt type, double-spaced) answer the following questions:1. Describe the process that your selected country went through to adopt IFRS, such as how long it took for the country to fully adopt IFRS.2. Did the country adopt IFRS or did they make changes to IFRS to adapt to their country’s culture or regulations?3. Has IFRS adoption made it easier for companies in that country to access the capital markets?4. Based on your research regarding your selected country, should the US SEC mandate adoption of IFRS? Why or why not?5. What is your personal opinion regarding whether the US SEC should mandate the adoption of IFRS?FINANCIALREPORTING/INTERNATIONALNew IASBLeader EmbracesChallengesA n interview with Chairman Hans Hoogervorstby Matthew G. Lamoreauxith more than 100 countries already using IFRS, a full stan- the National Bank of Washington indard-setting agenda and the SEC poised to decide in the Washington.coming months whether U.S. public companies will report CHALLENGESunder intemational standards, Hans Hoogervorst knows his challenges. Despite the adoption of IFRS by dozens ofWBut the second chairman of the International Accounting Standards Board (IASB)is no stranger to challenging financial leadership positions and public service. Mostrecently he served as chairman of the executive board of the Netherlands’ Authority for the Financial Markets (a regulatorcomparable to the SEC in the U.S. but withbroader authorities) and chaired the International Organization of Securities Commissions’ (IOSCO) technical committee.Before taking the reins of the decadeold intemational standard setter in July,www.journalofaccountancy.comHoogervorst had extensive involvementwith the board as co-chair of its FinancialCrisis Advisory Group and chair of theIFRS Foundation Monitoring Board,whose membership is made up of financial market regulators including SFCChairman Mary Schapiro.Between 1998 and 2007 he held anumber of positions in the Dutch government, including minister of finance,minister of health, welfare and sport, andstate secretary for social affairs. He alsospent three years as a banking officer forcountries (including all members of theEuropean Union), the U.S. and some otherkey economic powers such as India andJapan have not yet fully adopted international standards."If we get all those countries on board… then IFRS will be truly a global standard, and 1 think there’s a great chanceof achieving that in the next couple ofyears," Hoogervorst said. "What 1 wouldsee as the second and related challengeis to achieve consolidation of all theprogress that has been made in the lastdecade."September 2011 Journal of Accountancy 31FINANCIALThis consolidation of progress, he said,involves strengthening the lASB as an organization and improving its standards. "Ithink that we need to strengthen the infrastructure of the organization, the senseof ownership around the world and relationships with other authorities with responsibility for elements of the globalfinancial system."REPORTING/INTERNATIONAL"If you look at it carefully, I think it isvery clear that the SEC is still very muchon track for a decision on IFRS later thisyear, and I believe it will be a positive position, and everything is pointing in thatdirection."He also pointed out that the SEC staff’sconcept of establishing FASB as an endorsement body for IASB standards in the"It is very clear that the SEC is still very much on^r^^k for n decision on IFRS later this year."Hans HoogervorstOn standard setting, Hoogervorst said,the focus needs to be on reducing complexity and improving consistency. "1 thinkthat whatever our future agenda is goingto look like, we’ll need to work on the conceptual framework to improve the consistency of the underlying philosophy of ourstandards."U.S. "is not all that different from howother countries adopt IFRS."Hoogervorst does see potential objections to the approach based on its complexity but said "it will work itself out inpractice."US. ADOPTION "OPTION"On U.S. adoption of IFRS, Hoogervorst acPOLITICAL VERSUS TECHNICAL knowledges that all U.S. public companiesAlthough he’s not an accountant, Hooger- may not be ready for it. "I have no insidevorst doesn’t plan to shy away from tech- knowledge, but if 1 was the SEC, I wouldnical issues. "I don’t think it is possible to start with the larger U.S. companies, parsplit the policy from the technical," he said. ticularly those who are internationally ori"I cannot lead this organization if I don’t entated. If that means providing an optionget on top of the standards … and I look for those companies to voluntarily adopt atforward to that, because I find it intellec- an earlier stage, I think then we would altually very challenging to do."ready have gained a lot. This would provideHe does, however, intend to make full the necessary momentum for the remaininguse of Vice-Chairman Ian Mackintosh, who listed companies to adopt at a later stage."also joined the board in July after headingHoogervorst made it clear that he bethe U.K. Accounting Standards Board.Heves that most U.S. companies want the"We have so much work ahead of us, SEC to mandate a clear time frame for theit is more than one person at the top can bigger companies and the possibility ofdo, especially the extent of the global out- voluntary adoption. On the question ofreach that we have to do," he said. "So I whether the SEC simply giving U.S. pubwill share that with Ian, and also the in- lic companies the option to adopt IFRSternal management of our organization." without a mandate would be a step in theright direction, he was unequivocal.SEC’s IFRS TRANSITION"That would be very positive indeed,FRAMEWORKbecause we know that a lot of internaOn the so-called "condorsement" approach tional-orientated companies would like toto IFRS transition floated by the SEC staff have that option, and once they havein May (see "Beyond Convergence," Jo/A, crossed the bridge, others will follow. It’sAug. 2011, page 46), Hoogervorst re- not sufficient in the medium to long term,sponded positivelybut it would be a very good beginning."32 JournalofAccountancy September 2011PREPARING EOR ADOPTIONHoogervorst said the main lesson learnedfrom other IFRS adoptions around theworld is that "everybody can do it." "Ifyou look at the Americas, Argentina,Brazil, Canada, Chile, Ecuador, Mexicoare all switching to IERS. These are majortrading partners with the United States,and in the case of Brazil one of the majoreconomies now driving global growth.Businesses can deal with the transitionalarrangements given sufficient time and aclear and unambiguous decision.""If you give them clarity, clear dates, aclear commitment, they will get the jobdone," he said.Not to miss an opportunity to promotethe benefits of IFRS, "what you would expect intuitively," he added, "is that academic research has demonstrated that yes,indeed, because of increased comparability, increased reliability of accounting standards, the cost of capital has come downin countries adopting IFRS, and that evengoes for advanced economies with welldeveloped accounting standards, such asthe United Kingdom."RISK OF NONCOMMITTAL U.S.When asked what would happen if theU.S. did not commit to using IFRS,Hoogervorst appeared genuinely surprised. "You know, it is truly hard to imagine," he said. "What is clear is that there’sonly one set of accounting standards thathas a chance to become the global language, and that is IFRS."He believes an SEC decision this yearagainst incorporating IFRS would simplydelay the inevitable and reduce U.S. involvement in the IFRS due process."Suppose there was a truly negative decision at the end of the year, it is highly unlikely that we would have the internationalsupport for a new convergence program orthe very close, almost exclusive relationship we have with the FASB at this moment," he said. "That would all end.""I simply don’t think it’s in the American interest for that to happen. It’s not inthe interest of FASB for that to happen. It’snot in the interest of the U.S. businesswww.journalofaccountancy.comFINANCIALcommunity for that to happen. … TheUnited States has always been a leader inintemational financial reporting. Fordecades, U.S. GAAP was the gold standardof financial reporting. For the last decade,the U.S. has been highly influential in thedevelopment of IFRS. Why would the U.S.choose to give up this leadership position,especially given the nine years’ worth of effort that has already been put into bdnging IFRS and U.S. GAAP into alignment?"XBRLCiting positive feedback from the investorcommunity, Hoogervorst supports theIFRS Foundation’s commitment to advancing XBRL technology, but he cautionsthat XBRL needs to be kept in perspectiveas a technical tool.REPORTING/INTERNATIONAL"Investors say, ‘Yes, it is a very usefultool. Please go on with your activities inthis respect. But please make sure that itremains a technical tool and that it doesnot determine the direction of your standard setting.’ ""So our standard setting should not beddven by XBRL, but the other way around.tion is working to improve the IFRS XBRLtaxonomy so that it’s easier to use and alsoeventually will allow XBRL filings of IFRSfinancial statements via the SEG’s electronic filing system."I know it’s still currently not yet possible for the SFG to accept XBRL filings inIFRS, and for that reason, both the XBRL"Both the XBRL teams at the SEC and ourFoundation are in frequent contact to makethat the IFRS taxonomy does meet SFCexpectation*-^ "And if we keep that order, then I think itis a very useful technical tool."To that end, he said the IFRS Founda-teams at the SFC and our Foundation arein frequent contact to make sure that theIFRS taxonomy does meet SFC expectations," he said.RESPONDING TO CRITICSAICPA RESOURCESCPE self-studyIFRS Certificate Program (#159770)JofA articles"Beyond Convergence" Aug. 2011, page46"Convergence Milestone," Aug. 2010,page 26"Technology Considerations for Converting to IFRS," April 2010, page 26"IFRS for SMEs-U.S. GAAP ComparisonTool Available Online," April 2010, page 30"Countdown to Convergence," March2010, page 24Use journalofaccountancy.com to findpast articles. In the search box, click "OpenAdvanced Search" and then search by title.JofA videos"Sir David Tweedie: The Role of the U.S.in IFRS""IFRS Update: What the Nevi/ TimelineMeans for CPAs""Paul Volcker on the Impact of IFRSAdoption in Global Capital Markets"Use journalofaccountancy.com to findvideos. Click on the "Video" tab, then scrolldown the right rail of the video player to findrecent videos. To find older videos, click fhevideo player’s "Archived Videos" tab.ConferenceAICPA/IFRS Foundation Conference onIFRS: The North American Perspective,Ocf. 5-7, BostonFor more information or to register or makea purchase, go to cpa2biz.com or call theInstitute at 888-777-7077On-Site TrainingIFRS Essentials wifh GAAP Comparison:Building a Solid Foundation (#IFRS)IFRS Update and Review of ComplexTopics (#IUP)Introduction to IFRS: Grasping the BigPicture (#CL4IUSA)To access courses, go to aicpalearning.organd click on "AICPA On-Sife Training," thensearch by "Acronym Index." If you needassistance, please contact a trainingrepresentative at 800-634-6780 (option 1).WebsiteIFRS Resources from the AICPA,ifrs.comOTHER RESOURCESPublicationIFRS Accounting Trends & Techniques(#0099110, paperback; #WIF-XX, onlinesubscription)Hoogervorst responded to a U.K. Houseof Lords report in March that suggestedIFRS was conducive to "box ticking" andimprudence during the financial cdsis."If you look at how IFRS held up during the financial crisis, I think you candraw two conclusions," he said. "First ofall, in terms of box ticking, 1 think that theprinciple-based approach of IFRSs heldup well."In terms of prudence, I think welearned one lesson from the cdsis, whichis that the incurred loss model resulted ina cliff effect that discouraged banks tobegin impaidng when they should have."Both the L^SB and the FASB accept wehave to develop an expected loss modelwhich is more forward-looking, and youmight want to call that a little bit more prudent than what we have now. Although Iknow that the term prudence is a very sensitive term, I believe that, you know, if youcannot be sure, it’s better to be safe."Matthew G. Lamoreaux (lamoreauxm@gmail.com)is a freelance writer.WebsiteSEC’s IFRS Work Plan,tinyurl.com/356rwmnTo comment on this artide or to suggest an ideafor another article, contact Kim Nilsen, executiveeditor, at knilsen@aicpa.org or 919-402-4048.www.journalofaccountancy.comSeptember 2011 Joumal of Accountancy 33Copyright of Journal of Accountancy is the property of American Institute of Ceritified Public Accountants andits content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’sexpress written permission. However, users may print, download, or email articles for individual use.