THE INSTITUTE of Chartered Accountants of Jamaica (ICAJ) wishes to clarify certain statements regarding the implementation of International Accounting Standards (IAS) which were contained in an editorial entitled, 'New Accounting Standards' published in The Gleaner on Monday, July 7, 2003.While we are heartened that the editorial supports the prompt implementation of IAS, the article urged the Minister of Finance to, "stick to the deadline" for IAS implementation and urged "all auditors and their clients to co-operate in seeing to it that Jamaica is in full compliance as soon as possible."
This statement is misleading, as it is the ICAJ, which has the direct responsibility and which initiated the adoption and implementation of IAS and not the Minister of Finance and Planning.
The decision to adopt IAS as our national accounting standards, with effect from July 1, 2002, was taken by the Council of the ICAJ and supported by its members. The new standards are effective for financial periods beginning on or after 1 July, 2002 and were adopted concurrently with International Standards on Auditing (ISA).
The Institute's decision to adopt IAS is consistent with an increasing trend towards the harmonisation of accounting standards worldwide. A growing number of countries have already adopted IAS as their national standards and many others are in the process of doing so. In our region, for example, Barbados, Guyana, Dominican Republic, Costa Rica and Trinidad and Tobago have all adopted IAS as their national accounting standards.
IAS, which are now referred to as International Financial Reporting Standards (IFRS), are promulgated by the International Accounting Standards Board (IASB), based in the United Kingdom and are the core accounting standards for international use, providing investor desired qualities and transparency, reliability and comparability.
The editorial further stated that "some members of the profession are asking that the deadline be extended, but Dr. Omar Davies, the Minister of Finance, is resisting the request and we support his decision in the matter. Having already committed to the deadline we should stick with it."
IMPLEMENTATION
For the purpose of clarity, the Minister, during his address at the official opening of the 21st Caribbean Conference of Accountants hosted by the ICAJ, in fact stated that, "While we are not opposed to hearing any persuasive argument for a delay in implementation, at this time, we believe that delaying the implementation of IAS would do much more harm than good."
A detailed report on the minister's speech was published in an article in The Gleaner on Sunday, June 29.
We regard Dr. Davies's comments as an endorsement of the ICAJ's decision to press ahead with the implementation of IAS despite lobbying efforts in some quarters for a deferment. Companies are, therefore, expected to prepare their financial statements for financial reporting purposes in accordance with IAS for reporting periods beginning on or after July 1, 2002.
However, in recognition of the difficulty that some listed companies may experience in meeting their reporting deadlines for interim financial reports, the Institute allowed a concession to those companies, electing so to do, to continue to apply the local interim Financial Reporting Standard (Statement of Standard Accounting Practice C-3: 34) until 30th June 2003. This meant that interim financial reports issued after June 30, 2003 would have to be IAS compliant. We continue to hold discussions with the regulators and those who have indicated serious concerns, in an effort to overcome them.
We should also emphasise that at the company level, responsibility for implementing IAS rests in the first instance with the ICAJ member employed to the organisation in a relevant capacity (for example, Chief Financial Officers, Financial Controllers, Chief Accountants and Accountants). Such persons, along with the Board and the rest of the management of the organisation, are typically responsible for selecting and applying suitable accounting policies in keeping with IAS and preparing the financial statements presented to the external auditors. Thus, IAS implementation is not purely the purview of the external auditor, but it also the responsibility of Chartered Accountants in industry and commerce.
