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IFRS risk planning and controls execution: strategic considerations for financial managers.

Article Excerpt
EXECUTIVE SUMMARY

* Based on the current SEC road map, your company will need to evaluate how to perform U.S. GAAP/IFRS parallel accounting over a multiyear period.

* In creating a parallel accounting environment, your internal control and operational audit staff may need to consider the ramifications of modifying your company's systems and processes.

* Internal control and operational audit staff are in a great position to assist your company in evaluating impact areas with the IFR8 conversion. Their financial and accounting backgrounds, combined with the knowledge of the underlying processes and systems, will provide in-depth knowledge for conversion planning.

* It is critical for internal control and operational audit staff to get involved early to help guide the company in the planning and to ensure that their portion of the overall conversion cost estimate is included.

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Conversion to IFRS will be far more than a technical accounting exercise. Implementing IFRS will impact many, if not all, aspects of your business operations, including information technology. It may bring companywide changes that will spawn new risks. These include system changes, modifications to processes impacting employees' day-to-day duties, and new accounting policies.

U.S. GAAP and IFRS share many similarities, but they are also different in many areas.

Staff responsible for internal control over financial reporting (ICFR) under Sarbanes-Oxley (SOX) section 404 and operational audits will need to understand how your company plans to apply IFRS so they can take appropriate actions based on both operational risks and the risk...

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