Archive for March, 2010
One of the key aspects to IFRS adaption is determining the key changes to Information systems and identifying the appropriate level for consolidation system changes.
SOX has made Internal Controls to be looked at not as a one time exercise. For successful compliance the controls have to be existent, controls have to operational and continuously operational.
Automotive industry is perhaps one of the largest adapters of EDI in the world. Multiple tiers of suppliers, movement towards assembled components and control of inventory through JIT, have made supply chain communication a key requirement. However, with the ever increasing pressure to reduce cost, supply chain communication has become a focus area.
Moving on in the IFRS reporting process, let’s take a brief look at the process flow. The logical starting point is the Statement as per Local GAAP and ending with Statement as per IFRS. The transformation in between would consist of Measurement, Recognition and Reclassification.
Does a multi ERP environment make sense in an SME? Or should companies move to a single ERP only? There are pro’s and con’s to both the approaches and much of it would depend on the business strategy of the company.
Considering the impact areas, IFRS convergence has considerable challenges. Especially for companies with multiple operations, multiple sites and multiple system. It is the internal complexities that companies have built over a period of time, that makes IFRS adoption difficult.
Compliance to Sarbanes-Oxley (SOx) and other Internal Control requirement is a business compulsion now. Ongoing compliance is essential to maintain financial certification, making SOx a daily part of transaction processing. If not for SOx, for companies coming under IFRS Convergence, will have to address the same for financial reporting purposes.
IFRS Implementation will have wide ranging impact for an organization. Impact will be on business, technology and on the stake holders. Considerable preparation will be required internally in terms of gap analysis, guidelines, controls, training etc. Depending on the size, maturity and complexity of IT ecology, changes to transaction and analytical system could be significant. Finally, IFRS will have an impact (negatively or positively) on the way financial performance is reported.