IFRS transition deadline drawing closer - state of readiness varies among
companies: CICA/RBC Business Monitor

TORONTO, May 10 /CNW/ - Many executive CAs believe their companies are well positioned for Canada's transition to International Financial Reporting Standards (IFRS) but several enterprises remain in the early stages of preparation, according to the latest CICA/RBC Business Monitor (Q1 2010).

Seventy-nine per cent of the respondents whose companies will need to adhere to IFRS indicated that it is very likely their operation will be ready for the changeover. Another 16 per cent stated it is somewhat likely they will be ready. The move to IFRS is mandatory in 2011 for public enterprises with a December year-end and in the 2012 fiscal year for others.

Forty per cent of respondents stated their companies are nearing the end or have completed the transition process (32 per cent noted that their company is in the final stages while eight per cent said they had completed the process).

"It is welcome news to see many companies comfortably into the transition process, but lots of work lies ahead for others," said Ron Salole, vice-president, standards, Canadian Institute of Chartered Accountants. "Adopters should not underestimate the work that remains in a compressed time frame. The closer the deadline approaches the louder the ticking clock sounds."

Thirty-three per cent of respondents said that their company was at the mid-point of the process. Another 22 per cent stated they were in the early stages of the transition and two per cent of respondents said their companies had not yet started the process.

"Companies that are not past the half-way point in their changeover preparations are likely running behind and have some catching up to do," stressed Gord Beal, principal, transition to international standards, CICA. "Based on the European experience, IFRS adopters should not make the assumption that they will be able to hire consultants to make up for lost time. Individuals with IFRS expertise may prove to be rare and will be at a premium the closer we get to the changeover date."

The CICA has an IFRS-focused website (www.cica.ca/IFRS) to help members and businesses navigate the transition process. The website offers a comprehensive roster of materials, seminars and other helpful tools.

The CICA/RBC Business Monitor is issued quarterly. It is based on a survey conducted by the CICA and draws upon business insights of CAs in leadership positions in privately and publicly held companies across Canada.

Forty-four per cent of the almost 400 respondents indicated that their company will need to adhere to IFRS. For the Q1 2010 report, emailed surveys were completed by 397 CAs of 4,219 identified by the CICA as holding senior positions (CFOs, CEOs and COOs). The response rate was 9 per cent, with a margin of error associated with this type of study at +/- 5 per cent, with a confidence level of 95 per cent. The survey was conducted March 9 - March 18, 2010.

The CICA/RBC Business Monitor (Q1 2010) is part of an international initiative. The American Institute of Certified Public Accountants (AICPA) in the United States and the Institute of Chartered Accountants in England and Wales (ICAEW) in the United Kingdom also undertake quarterly studies that tap the insights of members in senior positions to provide a barometer of economic activity in their nations and as a basis for future comparative analysis across countries. A background document is available online at www.cicarbcbusinessmonitor.com.

About CICA

The Canadian Institute of Chartered Accountants (CICA), together with the provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants, represents a membership of approximately 75,000 CAs and 12,000 students in Canada and Bermuda. The CICA conducts research into current business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. It issues guidance on control and governance, publishes professional literature, develops continuing education programs and represents the CA profession nationally and internationally. CICA is a founding member of the International Federation of Accountants (IFAC) and the Global Accounting Alliance (GAA).

About RBC

RBC delivers a wide range of financial services through a variety of channels to individuals, small and medium-sized businesses and commercial clients, including deposit accounts, investments and mutual funds, credit and debit cards, business and personal loans, and residential and commercial mortgages. It is the personal and commercial banking division of Royal Bank of Canada (RY on TSX and NYSE).

For further information: Interviews with an official from the CICA can be arranged by contacting: Tobin Lambie, CICA, [phone] or c/o [email protected]