KPMG-AAA IFRS Faculty Survey Results Released

Sept. 5, 2008

FEI Summary

Survey results released Sept. 4, 2008 by KPMG LLP and the American Accounting Association show that “Relatively few universities currently have a strategy in place to incorporate International Financial Reporting Standards (IFRS) into accounting curricula in the 2008-2009 academic year.” 

Some highlights:

·         Present readiness: 22 percent of the 535 professors surveyed indicated that they can incorporate IFRS into curricula this year in any significant way, and sixty-two percent said that they have not taken any significant action steps

·         Next few years’ grads: the first class of graduating seniors likely to have a substantial amount of IFRS education will be the class of 2011, according to 30 percent of the professors, followed by the class of 2012, at 24 percent. Only five percent of the respondents expect the Class of 2009 to have substantial knowledge of IFRS, and 17 percent say it will be the class of 2010. Those views are in line with the fact that 42 percent of the professors felt that textbooks would not be ready until the 2010-2011 academic year.

·         CPA Exam: As to when they felt the CPA exam would include a comprehensive coverage of IFRS, 34 percent indicated 2011 followed by 29 percent who said 2012.

·         Curriculum development, placement in schedule: Seventy-nine percent of the professors said the key challenge for them is developing curriculum materials, and another 72 percent said it will be making room for IFRS in the curriculum.

·         Faculty responsibility: In terms of plans to prepare faculty to teach IFRS, 49 percent said it is on the shoulders of the individual faculty member. Sixteen percent said their schools will provide funding to attend training sessions and/or acquire study materials.

·         Administration support and resources: College administrators and funding: 23 percent of the professors indicated that the administrators responsible for allocating resources understand the change very well. Another 30 percent say that the administrators have some understanding, and 38 percent expressed the view that they have little or no understanding of the effort needed to make the change.

·         Approach: In incorporating IFRS into their curricula once it becomes an acceptable reporting framework for U.S. companies, 56 percent of the professors said they will focus on comparing and contrasting IFRS and U.S. GAAP standards and 37 percent said they would compare and contrast IFRS and U.S. GAAP foundational concepts; 26 percent expressed that they will teach IFRS standards and conceptual framework only. Many others, 33 percent, were undecided. (In selecting responses, professors could select all choices that apply.)

·         Convergence: 42 percent said that the SEC and FASB should continue with convergence initiatives and adopt IFRS only when an acceptable level of convergence is achieved.

The KPMG-AAA IFRS Faculty Survey was conducted in July and August, prior to the U.S. Securities and Exchange Commission’s August 27 vote to release its proposed IFRS Roadmap.

Phil Reckers, VP of the AAA’s Professional Advisory Board, said, “This is a major undertaking for universities … Part of the challenge for professors is to make sure that their upperclassmen have some knowledge of IFRS before they leave campus, and therefore they are likely in the early phases to focus in the areas of intermediate and advanced accounting.”

Manny Fernandez, KPMG’s National Managing Partner – University Relations and Recruiting. said, “It is imperative that professors take the time to educate administrators on the overall impact of IFRS in business and present a needs assessment for their department and curricula.” He added, “There is no doubt that the early movers in incorporating IFRS into the curricula are those that have adequately informed university leadership, and it will be those schools that will be more successful in building their brands in recruiting students.”

For complete results, see the KPMG-AAA IFRS Faculty Survey.

Prepared Sept. 5, 2008 by Edith Orenstein, Director, Technical Policy Analysis, Financial Executives Interational (FEI). This summary does not reflect FEI opinion unless specifically noted above.