IMPACT OF IFRS ON ORGANIZATIONAL INFORMATION SYSTEMS

Abstract

One of the most important changes in the history of financial reporting is the change from local or national standards to a uniform, consistent set of rules known as IFRS (International Financial Reporting Standards). These standards are currently being reviewed by the US Securities and Exchange Commission (SEC) to replace US Generally Accepted Accounting Principles (GAAP). There are many advantages of a worldwide standard for accounting. But this change will require significant changes in organizational information systems. This study reviews financial executives views on preparation for this change as well as the impact on their IS (Information Systems). This study finds that 83% of financial executives estimate their Information Systems (IS) effort will be greater than 6 months and 45% estimate the effort to be greater than one year. Despite this however, less than 5% of executives’ organizations have conversions in progress or completed. Only another 18% have started planning for the conversion. Little response variance is found due to size of company or industry. There is difference between public and private companies. Finally, this study found little IS involvement is IFRS conversion.