Academic journal article Journal of Accountancy

Adopting IFRS: One Nation's Experience

Academic journal article Journal of Accountancy

Adopting IFRS: One Nation's Experience

Article excerpt

Effective March 4, SEC rules allow foreign private issuers listing securities in the United States to report exclusively in International Financial Reporting Standards (IFRS) without reconciling their financial statements to U.S. GAAP. Israel is second only to Canada in the number of foreign private issuers that register with the SEC and has recently adopted IFRS. The JofA spoke with Itamar Levin, editor of The Accountant, a publication of the Institute of Certified Public Accountants in Israel, on how the transition to IFRS has gone.

JofA: What are the major issues and challenges facing the accounting profession in Israel?

Levin: Our top ranking professional challenge is the implementation of the IFRS from Jan. 1,2008. This is pure IFRS, not a version of it as has been done in Europe, and this is a very serious challenge for everyone who is involved in financial reporting. The second challenge touches upon the expectations gap and our need to explain to the public what auditors can and are authorized to do and what they cannot and are not authorized to do.

JofA: Israel has nearly completed its transition to IFRS. How has the transition gone?

Levin: Up to now, the implementation of the IFRS has been moving forward satisfactorily, but you can certainly understand that the real challenge is still in front of us, from the year 2008 and thereafter. In the first stage, public companies have been required to report about their preparations for the transition and, after that, about the main financial implications that are expected.

Personally, I think that the first two to three years will not be easy ones, to say the least, since what one is talking about is the replacement of the language in which the companies, the auditors, the analysts, the banks and the interested parties are talking in effect we are talking about the entire economy. …

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