Just 3 per cent of Australia's chief financial officers are confident they have come to grips with impending changes to the way companies report their accounts.
According to a survey of 100 leading CFOs conducted by the Association of Chartered Certified Accountants (ACAA), more than half have yet to identify the major changes that will have to be made to their processes when the new International Financial Reporting Standards replace the current Australian standards in January 2005.
The ACCA warns that 29 of the current 42 Australian accounting standards will be changed. Another three will be introduced.
“What's also worrying is that 73 per cent [of respondents] said they hadn't even set out a timetable to introduce the changes,” said ACCA executive director Allen Blewitt.
The ACCA said the changes, devised following accounting scandals like Enron's in the US, applied to all companies, listed or otherwise, as well as institutions such as charities and governments.
“Fifty-one per cent of boards haven't even discussed these changes,” Mr Blewitt said.
“These results are particularly concerning given that many organisations will not only have to produce accounts to existing [Australian Accounting Standards] next year but will also have to provide comparative data in accordance with the new standard.
“This means that organisations really have to be ready for the change by this time next year.”
Mr Blewitt said another issue that still had to be addressed was changes to legislation. The Government would have to change tax legislation and life insurance acts to reflect the changes. “At this stage, there has been no public announcement and corporate Australia would like some reassurances.”
Respondents expect the main areas to be affected by the changes would be employee benefits, goodwill, intangibles, depreciation, financial instruments, foreign exchange, investment properties, leases and tax.