Call for collaboration on accounting system changes

PROPOSED changes to accounting practices should benefit companies but further collaboration is needed before they are made law, according to financial advisers Deloitte.

The Accounting Standards Board for Ireland and Britain (the ASB) has proposed the abolishment of the widely-used GAAP accounting standard, used by most firms across Ireland and Britain, in favour of the wider International Financial Reporting Standards (IFRS) international standard, by 2012.

While some Irish companies do use the IFRS system, the only ones obliged to are those publicly quoted. The new proposals have been met with a broad welcome and a move would be in line with the policy of the Institute of Chartered Accountants in Ireland.

Deloitte said the proposal could ultimately benefit Ireland’s export-led economy. However, it wants the ASB to outline more fully which of the strands of IFRS will relate to Ireland’s complex accounting network.

“The current mixed system of having two different sets of accounting frameworks in practice is not terribly efficient... In contrast, the new rules could bring a lot of stability,” commented Glenn Gillard of Deloitte.

He said: “Irish accountants... ought to sit up and take notice. These proposals, if implemented, will fundamentally change accounting in Ireland. We’re a small open economy with up to 80% of what we produce exported. It’s in the national interest that the accounts of even the smallest of our exporters or importers are internationally comparable and this will be an advantage of the new proposals.”