While most CFOs from the United States, Germany, France, and the United Kingdom favor international accounting standards over local ones, American finance chiefs like certain key aspects of the work of the International Accounting Standards Board more than their European peers do, according to a new study by Duke University and Oxford University.
The aspects of IASB that U.S. CFOs are more favorably disposed toward are due process, transparency, accessibility, inclusiveness, and accountability, according to the study of 749 corporate finance executives, which was published last week.
Concerning due process, 88 percent of U.S. respondents said IASB standardization was good or very good, versus 65 percent of their European counterparts. For the survey, which was conducted over several months ending in February of this year, finance executive from U.S. and European companies were asked to “assess the process by which the IASB develops international standards.” Participants rated the IASB on each aspect by choosing from one of four responses: “very bad,” “bad,” “good,” and “very good.”
On transparency, the responses among U.S. CFOs were 80 percent good or very good versus 51 percent among European finance chiefs; on accessibility, 69 percent vs. 52 percent; inclusiveness, 72 percent vs. 44 percent; and accountability, 75 percent vs. 38 percent.
More than 85 countries, including all member states of the European Union, require the use of the International Financial Reporting Standards or International Accounting Standards, the precursor of IFRS. In other countries, including the United States, some companies IAS or IFRS.
U.S. respondents were also more confident than their European counterparts that IFRS aids financial stability. Fifty percent of U.S. financial executives said that the global standards increase the stability of financial markets versus 25 percent of German CFOs, 11 percent of French finance chiefs, and 8 percent of top U.K. finance officials.
The study also found that nearly 60 percent of U.S. and European financial executives think the complexity and cost of switching reporting standards may outweigh the benefits.