ACCA: Standardisation would stop firms overstating finances

Companies may be cherry-picking one set of accounting rules over another to show their financial position in a better light, it was claimed today.

This has led to a call from the Association of Chartered Certified Accountants (ACCA) for firms to adopt International Financial Reporting Standards (IFRS).

“There are two sets of accounting rules allowed in Ireland and they both give different profit figures,” said ACCA Ireland’s advisory services manager Aidan Clifford.

“Quoted companies must use IFRS but unquoted companies may use IFRS or UK Generally Accepted Accounting Practice (UK GAAP).”

“It is in the interests of comparability and cost that we no longer allow an option. IFRS is used in over 100 countries compared to the very limited use internationally of UK GAAP. IFRS should be the standards of choice for Irish companies.

“Some of the diverse accounting treatments can make substantial differences to a company’s bottom line and net asset position. Examples would include the treatment of goodwill, investment property, errors in previous years, taxation and construction contracts.”