Sunday, February 10, 2013
John Donahue, Moss-Adams
Last Thursday Beta Alpha Psi was honored to have John Donahue, a partner from Moss-Adams, present at its weekly meeting. Mr. Donahue joined Moss-Adams in 2002, and recently completed a rotation within the Office of the Chief Accountant of the SEC. During his presentation, Mr. Donahue talked at length on IFRS convergence within the U.S., and also shared some of his experiences serving as a Professional Accounting Fellow within the Office of the Chief Accountant.
The Office of the Chief Accountant serves as the “national office” to the Securities and Exchange Commission. While living in Virginia, Mr. Donahue assisted in producing the IFRS “Work Plan” of the SEC, a document focused on the IFRS-U.S. convergence debacle. He also had the opportunity to work one-on-one with some of the largest companies in the U.S., and assist in standard setting oversight and rule making.
Mr. Donahue also shared some of the benefits and costs of U.S. adoption of IFRS. He noted that the greatest costs would hit mid-level and small companies. Many large companies already are using IFRS in some capacity due to the international nature of their business and subsidiary holdings. As such, a switch to IFRS would probably not cause much of a problem to them (and in fact, would probably be welcomed with open arms). But for smaller companies, who are mainly concerned with being comparable to other small companies within the U.S., convergence would be costly, and wouldn’t lead to very much gain in the aggregate—if any at all. He also noted the sheer magnitude such a switch would make within contracts and regulations alone, where U.S. GAAP is mentioned frequently. Such a change would require changes and updates to every one of those contracts, regulations, and similar documents—a major feat by any means.
As a bit of advice to the students listening, he taught that the best preparation for IFRS convergence is to have a baseline background of international standards prior to convergence actually occurring. While it is unclear when convergence will take place, having a basic knowledge of international standards to which we can hearken back will greatly assist us when IFRS adoption finally becomes a reality.
While the future of IFRS convergence is unknown in many ways, Beta Alpha Psi was grateful for the chance to learn from John Donahue about IFRS adoption, and gain his perspective on the issue as a whole.
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