Managers unaware of new standards

Just over half of business managers are aware of new accounting standards, according to research conducted for Deloitte & Touche. The survey of 303 business managers from a range of companies found that only 51 per cent were aware of the impending international standards.

As would be expected, the survey found that the level of awareness of the new standards was higher among managers in the financial services sector and in companies with a turnover in excess of €10 million.

The International Financial Reporting Standards (IFRS) are being introduced in order to assist the development of an integrated financial market within the EU. It is expected that in time existing Irish accounting standards, as they apply to private companies, will merge with the new international standards.

Amongst the new standards is one stipulating that all EU-listed companies prepare consolidated financial statements in accordance with IFRS rules by January 1st, 2005.

The changes will require Irish companies to put a significant conversion process in place and will change the way in which profits and earnings per share are reported. The new standards will also make for significant changes to the balance sheets of many Irish companies, according to Deloitte & Touche.

The survey found that many Irish managers viewed the introduction of new standards in a negative light, with half of those surveyed believing the new standards will bring additional costs.

Mr Ronan Nolan, of Deloitte & Touche, said the new standards were part of the response to recent accounting scandals. He said that 68 per cent of business managers believed the new standards would bring additional reporting requirements, while 54 per cent felt they would bring increased transparency. Just under half felt standards would improve auditor independence and 44 per cent believed they would improve risk management.