Mind the GAAP - ACCA says a single set of accounting principles will create more jobs for Ireland
In response to the Accounting Standards Board’s consultation on the Future of GAAP (Generally Accepted Accounting Principles), ACCA Ireland (Association of Chartered Certified Accountants) said that the adoption of a single set of worldwide accounting rules like the International Financial Reporting Standards (IFRS) will create more jobs for Ireland. Multinationals can have manufacturing operations across the globe but the back office accounting is often done in one location, referred to as a “Shared Services Centre”. At the moment, there are three tiers of accounting standards in operation in Ireland and one of the issues that has hindered the location of such centres here was the need for local expertise in the different rules.
The widespread adoption of IFRS accounting rules and the dropping of local requirements means that local accounting knowledge is no longer required. Irish accountants are already very familiar with IFRS and this is making Ireland a very attractive location for locating centralised accounting functions and thereby creating high value high skill jobs. The other positive knock-on effect of a multinational setting up their shared services operation here is the creation of further jobs in support services roles like catering, waste management, maintenance and security.
In Ireland, the three tiers of accounting standards in operation are the International Financial Reporting Standards (IFRS), which is used by most of the rest of the world; Irish and UK GAAP and the Financial Reporting Standard for Smaller Entities (FRSSE). All three produce different answers to key calculations like profit and the treatment of costs like interest on borrowings and the treatment of investment property. ACCA wants to see Irish and UK GAAP and FRSSE replaced by full IFRS and IFRS for Small and Medium Sized Enterprises (SMEs) where appropriate, which are the global financial reporting standards.
Aidan Clifford, ACCA’s Advisory Services Manager, says: “It does not make sense for two small countries to have a different set of accounting rules to most of the rest of the world and we have long supported the convergence of Irish and UK GAAP with IFRS. We appreciate there will be challenges and costs in adopting IFRS for SMEs as a replacement to Irish and UK GAAP. But the benefits will far outweigh these challenges. ”
“ACCA conducted field testing about IFRS for SMEs with a cross-section of companies using Irish and UK GAAP. The findings showed few issues in transiting from one reporting system to another. For this reason, we believe IFRS for SMEs, with some key exemptions for very small businesses, is the way ahead.” Mr Clifford continued.
For further information, please contact:
Aidan Clifford, Advisory Services Manager, ACCA Ireland Aidan.clifford@ie.accaglobal.com
