Marie Leone, CFO.com | US
October 8, 2009

IFRS Will Increase Fraudulent Financial Reporting

Many of the country's top forensic accountants have looked in depth at both GAAP and IFRS. Many of them agree that GAAP is prone to income statement fraud and that IFRS is prone to balance sheet fraud. However, those forensic accountants who are specialists in financial statement fraud agree hands-down that the IFRS poses the greater risk of BOTH income statement fraud and balance sheet fraud. Of course, there are NO forensic accounting experts that specialize in financial statement fraud on the boards of ANY of the pertinent regulatory or enforcement agencies, including the SEC, FASB, IFRS, FINFRA, PCAOB, etc. So naturally, the SEC wants the public to jump head-first into the water, completely unaware that it is shallow and filled with dangerous rocks. The SEC has demonstrated with Madoff that they are unable to catch a cold, let alone a crook. And now they want to lead America into the treacherous waters of IFRS?

Posted by Ralph Adamo | Oct 13, 2009 1:16 PM ET

IFRS Will Increase Fraudulent Financial Reporting

Many of the country's top forensic accountants have looked in depth at both GAAP and IFRS. Many of them agree that GAAP is prone to income statement fraud and that IFRS is prone to balance sheet fraud. However, those forensic accountants who are specialists in financial statement fraud agree hands-down that the IFRS poses the greater risk of BOTH income statement fraud and balance sheet fraud. Of course, there are NO forensic accounting experts that specialize in financial statement fraud on the boards of ANY of the pertinent regulatory or enforcement agencies, including the SEC, FASB, IFRS, FINFRA, PCAOB, etc. So naturally, the SEC wants the public to jump head-first into the water, completely unaware that it is shallow and filled with dangerous rocks. The SEC has demonstrated with Madoff that they are unable to catch a cold, let alone a crook. And now they want to lead America into the treacherous waters of IFRS?

Posted by Ralph Adamo | Oct 13, 2009 1:16 PM ET

Bad Idea

Also, it is my belief that Auditors will be more at risk. Under GAAP there are bright lines, and if there is litigation, auditors can refer back to the standards and say "this is how it is in the standards." With IFRS, there is more use of professional judgment. This creates two problems: (1) Again, a decrease in comparability because your professional judgment and my professional judgment maybe different; and (2)Increase in litigation costs in the event that your "professional judgment" is wrong.

Posted by John Schmidlin | Oct 9, 2009 12:05 PM ET

Bad Idea

Notice Tweedie did not address the issue of carve-outs. There is no point in converging with IFRS when each country makes it's own carve-outs, thereby reducing comparibility and consistency. Think about it, will our financial statements be anymore comparable to those of foreign countries when all countries have their own version of IFRS? No, probably not. Also, who cares if the Big Four support it. All they see is the extra money that will be in their pockets when they get the opportunity to charge for helping companies with the convergence.

Posted by John Schmidlin | Oct 9, 2009 11:43 AM ET

IFRS Returns to Front Burner

IFRS will be a disaster for the United States and its investors. Have we learned nothing from Enron? A buffet of "principles based" concepts that favor higher profits with no comparability and no accountability. We need stict rules based standards that can be enforced, send fraudsters to jail and result in the seizure of assets to protect Americans. And speaking of Americans, the last thing we want is anyone with a "Sir" before their name telling us anything. The proper course of action would be to bring international standards up to U.S. GAAP standards, as was the original intent of the IASB when it was formed in 1973.

Posted by randall enders | Oct 9, 2009 11:12 AM ET