The pressures of IFRS, or: cleaned out!

My favourite recent news release from the IFRS Foundation was certainly the announcement that the Foundation has decided to review its cleaning contract…

In strangely but endearingly personal terms, it said: “This letter is to invite you to put forward a proposal for the work outlined below.” It set out a list of twelve bulleted requirements, including “Show innovations in cleaning practises and equipment” – I’ve never thought about the issue before, but my head positively started buzzing with such innovations. Other stimulating aspects of the requirements included “Confirmation of whether your firm has any potential conflicts of interest,” which triggered fantasies of exciting scenarios in which undercover cleaning staff swipe advance drafts of IFRIC meeting materials and leak them to the accounting dark side. Anyway, it was only with difficulty that I restrained myself from submitting a proposal.

I also jokingly sent the release to an accounting colleague, asking him if he intended to apply. Maybe I should have anticipated his response, which was that if he had a cleaning contract at the IFRS, he’d use it to sweep out all the people who produce those over-the-top ivory-tower requirements, and so on. Well, that’s him, not me. I thought of drafting a comic article about other recent IFRS Foundation contract opportunities, but I basically wrote that already. So then I moved on to muse a bit more seriously about IFRS-related job opportunities, prompted by several recent anecdotal references to difficulties in filling financial reporting roles. These references applied to the Canadian market, and I couldn’t find any specific commentary on that, but a recent British report said “one thing that remains a constant is the high demand for accountancy and finance professionals worldwide.” Observations included:

  • ‘2018/2019 has had many regulatory changes to reporting standards, specifically IFRS 15 and IFRS 16,’ says Andy Young, associate director, accountancy and finance at Investigo. ‘This has caused businesses to change how they report to the market, hence they have needed support both in terms of the change management perspective, but also in running the business-as-usual function.’
  • Also to impact financial reporting will be the momentum behind integrated reporting and the growing trend around environmental, social and governance (ESG) issues. Given accountants’ adherence to a strict code of ethics, their curiosity and their insight into organizational performance, they are well placed to be at the forefront of driving the change to a lower carbon economy, to ensure ethical supply chains, to steward corporate governance and to improve performance in long-term sustainable ways.

I wonder though whether the people drawn to the specialized areas cited in the second paragraph won’t be by and large the same people who might otherwise specialize in IFRS. In the past I noted on parallel lines: “I’ve heard anecdotal accounts that accounting firms have been challenged by too many staff members preferring an ASPE-driven environment to an IFRS-driven one (because of greater ease of learning and use, a more “entrepreneurial” accompanying culture, the absence of perceived CPRB-mandated compliance overkill, and so forth) but I don’t know what magnitude of problem that constitutes.” Somewhat similarly, the still evolving and less defined nature of the requirements in areas like ESG reporting may make them more appealing to creatively-minded accountants.

I should underline there that I don’t personally find IFRS limiting or stifling – the very existence of this blog speaks to that. But there aren’t a lot of blogs like this one, and much of the commentary on IFRS from more established sources feels dutiful and heavy-hearted. Financial reporting and (especially) audit are heavily susceptible to becoming pressured, governed by deadlines, competing demands, multiple levels of compliance and other pleasure-squeezing factors. Of course, a lot of that is just commercial reality, or a response to increased risk and complexity. But it causes a practical problem, that someone with the aptitude and capacity to be a leading IFRS practitioner will almost always also be capable of being a leading practitioner of some other kind, and perhaps of finding more expressive freedom in that alternative space. We should certainly remain wary of creating a regime that too often makes hearts sink (obviously my colleague is hardly the only one with such views…)

Anyway, I couldn’t help noticing that the proposal for the cleaning contract was dated July 15, 2019, a Monday, and apparently posted to the website on that day, and yet allowed only four days to submit a response, up until 5 pm on Friday, July 19, even observing dourly that “proposals received after the aforementioned deadline will not be considered.” Perhaps the IFRS Foundation’s new premises are already knee-deep in grime, but such a deadline seems to me more than a little aggressive, and as such to provide an unwitting symbol of how IFRS-related matters must so often battle against ramped-up, frequently self-defeating expectations and ultimatums. You want “motivated and friendly cleaning/housekeeping staff”? Well then, ease up and smile!

The opinions expressed are solely those of the author

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