Illinois accountancy schools ahead in teaching international standards
October 8, 2009
Filed under News
The University of Illinois’ Department of Accountancy is getting a head start on educating its students on International Financial Reporting Standards, or IFRS.
The IFRS is a set of accounting standards that is widely used in global business outside of the United States.
Although the University’s accountancy department teaches IFRS standards, the Securities and Exchange Commission (SEC) halted a plan requiring American businesses to converge the Generally Accepted Accounting Standards (GAAP) with IFRS so international business might run more smoothly.
This is a change many university accountancy programs have not yet made, according to a survey by the business research company KPMG.
“It’s important whether or not we are converging,” said Ahmed Rashad Abdel-Khalik, professor of accountancy at the University. “Corporations now are global and many are branching overseas.”
Abdel-Khalik said the most notable difference between the international and American standards is that international standards allow room for accountants to make judgments and assumptions, whereas American standards have more concrete criteria.
More than half of college accountancy professors who responded to the KPMG study said they fear SEC administrators are not aware of the difficulties of altering curricula.
Despite those challenges, 83 percent of the 500 college accountancy professors polled said IFRS needs to be incorporated into college accountancy curricula by 2011.
Seven out of 10 professors said they felt the biggest challenge of teaching IFRS is finding room in their curriculum. The University began teaching this concept about four years ago, Abdel-Khalik said.
“There are two philosophies. One is to offer a separate course for IFRS. The other is to incorporate as we go,” Abdel-Khalik said. “We are incorporating as we go.”
One such class that has IFRS incorporated into it is ACCY 301, a junior-level accountancy class that is required for accountancy majors. One of the professors, Clifton Brown, said IFRS has been incorporated into required readings, activities and examinations.
Other university accountancy programs in Illinois are taking a similar approach to IFRS education.
According to James Young, the chair of the Department of Accountancy at Northern Illinois University, IFRS is being overlayed with GAAP into the core accountancy classes. Young said NIU is also considering adding a special topics course devoted largely to IFRS that upperclassmen and graduate students in accountancy can choose to take.
“Employers come to us and say, ‘It’s really important that your students have at least a sense of what the differences are, and that we are going to start asking about IFRS in job interviews,'” Young said.
Illinois State University has also started to teach its students IFRS.
Gerald McKean, interim chair of the Department of Accountancy at ISU, said the department added IFRS into its core curriculum and also offers an international reporting class that has a significant IFRS component,
“We are trying to show the differences and similarities between IFRS and GAAP,” McKean said.
Both Young and McKean said the biggest driving factor needed for curriculum alteration is that the Certified Public Accountant, or CPA, exam is going to start asking IFRS–related questions of students. They said accountancy textbooks are beginning to incorporate IFRS into the text.
“Our students, upon graduation, will be exposed to IFRS and so we feel it is appropriate to start talking about it now,” Young said.
Brent Kerby, junior in Business who is majoring in accountancy, said he is glad the University is incorporating IFRS into the curriculum.
“I’m glad we’re starting to learn it now if it’s going to become a standard, even if it takes 20 years,” Kerby said.