IFRS: A boon for CA Students and Accounting Graduates
1. Introduction to IFRS: IFRS knows as International Financial Reporting Standards are a set of accounting rules and regulations that are set by the IFRS Foundation and the International Accounting Standards Board. These standards are critical since they govern all the global accounting activities such as keeping transparent and consistent financial statements, how companies around the world should operate and maintain their accounts, the different types of transactions that occur on a daily basis, and all the other accounting and financial events.Transparency, Accountability, and Efficiency are very critical terms on which the IFRS mission statement is based. IFRS is a not for profit organization formed to serve the public interest and not to be influenced by any internal commercial interests.
2. Linkage between IFRS and Careers: IFRS is beneficial for CA students and accounting graduates because it is the next big step in their careers. In order to be a competent accounting professional in the world, it is necessary to have detailed knowledge about IFRS which governs the accounting world. When accounting graduates step into the practical world and the job life, they have to be equipped with the necessary knowledge, skills and expertise in order to land a good job. In today’s competitive world it is important to have the best qualifications and certifications in any field, and accounting is no different. IFRS certification as well as diploma for both chartered accountants and accounting graduates are available which can really secure an accounting graduates future in terms of future. The Association of Chartered Certified Accountants (ACCA) also provides IFRS certifications which gives you detailed introduction in to this field and how accounting individuals can implement it globally.
Individuals who want to pursue a career in accounting standards because they genuinely find it interesting and since the rules and regulations make an impact on the lives of real people and the accountancy profession in itself, should definitely opt for a IFRS certification. According to Alex Hagger, the manager of finance and accounting at Badenoch and Clark: “An IFRS specialist can expect the nature of their work to be fairly technical” which highlight’s the level of difficulty of this field in particular however, this is no way is meant to discourage graduates from opting for it since on the contrary the demand for IFRS experts is very high nowadays. There is a huge scope for growth in IFRS for individuals wanting a career in accounting and finance. Nowadays, IFRS professionals are needed in advisory companies which provide various accounting advisory services to different firms, audit firms, banking sector, consultancies, and as lecturers and professors in the education sector.
3. Implementation of IFRS: With the help of IFRS, CA students and accounting graduates can work towards the proper implementation of accounting standards. Checks and balances are present for all accounting and finance firms which need to be implemented to keep them in line. These graduates can be the individuals who enforce these rules in the future and prevent any major financial scandals and fraud. One of the famous examples of financial scandals is the Bernie Madoff scandal that occurred in 2008 in which the main culprits were convicted of the charges filed against them. With time a lot of these scandals have occurred, but the fact that they are still occurring around the world points us to the direction of the evident loopholes in the system as well as in the implementation of the IFRS rules. IFRS foundation also published the taxonomy 2018 which includes proposed changes for improving the quality of tagged data and to make it easier to use. Proper implementation notes, time period for reporting information, and documentation labels are all very critical improvements for better implementation.
4. Benefits of IFRS: According various authors the adoption of IFRS leads to strong economic benefits such as an increase in market liquidity, increase in the market value of stocks, and lower cost of capital in countries with rigid financial reporting. IFRS helps graduates promote growth in international business by encouraging investors to invest. Since international accounting standards help investors better understand the opportunities available all around the world. As IFRS is becoming a single, trusted accounting language, it helps in reducing international reporting costs. Comparison with different companies can also be done since data is provided on the same basis. IFRS is helping companies move towards automation and the reduction of reporting cycles which is advantageous for the new generation and their rapidly developing interests in advanced and innovative technology.
5. Impact of Biases: However, inherent biases do exist in every human being which can cause issues in the long run. Some employees who are motivated by their own self-interests can easily use IFRS to carry out financial misrepresentation or financial frauds. The loopholes found within the IFRS can be exploited by professional employees for their own personal gains. According to a report published by the ACCA on “Banishing bias? Audit, objectivity and the value of professional skepticism” human decision making and audit decisions are affected by many cognitive biases hence there is a need to explain these concepts and concerns in detail to the accounting graduates so that all future accounting and financial decisions are made with as much objectivity and neutrality (free from bias) as possible.