An American adoption of International Financial Reporting Standards (IFRS) would be a significant step for the global business community.
Should the United States move from Generally Accepted Accounting Principles (GAAP) to IFRS it would benefit economies and businesses throughout the world, CPA Australia chief executive officer Geoff Rankin said.
'If you have the world's largest economy signing up to IFRS the effect would be significant - not just domestically but also through its unparalleled global reach,' Mr Rankin said.
'The powerful influence of US investment would increase the pressure on other nations, including developing nations, to sign up to IFRS.'
'In an increasingly global business environment where time is of the essence, having uniform standards makes sense.'
'Speaking a single accounting language would increase the global flow of capital as it would enable prospective investors to make investment decisions based on a single set of principles rather than sifting through a range of interpretations.'
Mr Rankin said the accounting profession would play a crucial role in delivering an effective transition should it come about.
'An American shift to IFRS would present the accounting profession with challenges and opportunities, especially those who have worked in an IFRS environment. Importantly it would offer the chance to exchange knowledge and skills,' he said.
'With Australia being an early adopter of IFRS, many Australian–trained accountants will be experienced in driving the transition from other sets of standards to IFRS. It means they'd be ideally placed to work in a changing environment and to help train American accountants to do the same.'
'As with its effect on the business world more broadly, an American transition to IFRS would also impact the way the accounting profession trades knowledge and skills.'
Mr Rankin said such a move would broaden CPA Australia members' horizons.
'Our members already operate in 100 countries and an American move to IFRS and its flow-on effects will further enhance their ability to work across the globe.'
The IFRS is a principles-based standard while the US GAAP is a rules-based, more prescriptive regime. Australia adopted IFRS in 2002.
