Virginia Tech's Pamplin College of Business is one of two schools selected to partner with audit and consulting firm Deloitte to develop much needed college accounting curricula on the International Financial Reporting Standards (IFRS).
IFRS is being used in more than 100 countries and about 40 percent of Fortune Global 500 companies, said Sam Hicks, an accounting and information systems associate professor who is coordinating the initiative in Pamplin. “With the Securities and Exchange Commission considering allowing U.S. multinationals to use IFRS in the near term — perhaps as early as 2011 — the speedy integration of IFRS into accounting curricula is an important challenge for business schools,” he said.
With an $81,000 grant from Deloitte, Hicks is working with a team of faculty members and graduate students to prepare teaching materials aimed at helping professors to incorporate in their courses the differences between IFRS and U.S. accounting rules for financial reporting, known as U.S. GAAP (Generally Accepted Accounting Principles).
Large accounting firms already have relevant fact sheets and reports, and links to these resources are being compiled by the team, Hicks said, but “we are really focusing on classroom materials for use this fall and beyond.” The materials being developed include summaries of the major differences between IFRS and U.S. GAAP and the problems of transition, exam questions for faculty use, and cases and exercises for student use. “At the intermediate accounting level,” Hicks said, “students learn best by analyzing a single transaction and applying the appropriate accounting standard, in this case, the IFRS, to that transaction."
Doctoral students Rebecca Fay and Jennifer Edmonds, who are specializing in auditing, are writing most of the materials, he said. Accounting and information systems faculty members John Brozovsky and Patty Lobingier are reviewing and testing the materials. They presented their plan of work to a meeting of the Federation of Schools of Accounting, sponsored by Deloitte in May.
The finished product, Hicks said, will be presented at the annual meeting of the American Accounting Association (the national organization of accounting professors) in August and made available to all accounting professors through the association’s website.
D.J. Gannon, partner and leader of Deloitte’s IFRS Center of Excellence in the United States, said that existing curriculum materials have “scant amounts of IFRS content.” Textbooks, he said, “normally publish on a three- to four-year cycle. And faculty are pressed for time to create meaningful course materials that will help students understand IFRS and U.S. GAAP.”
At Deloitte, Gannon said, “we recognize our responsibility to step forward and help academia educate and prepare tomorrow’s accounting professionals to apply this new language of accounting and financial reporting.” Deloitte will also contribute case studies for use in the classroom and the expertise of its professionals as guest lecturers on campus.
Ohio State University is the other school that will develop IFRS materials for its curriculum with assistance from Deloitte, which anticipates working with additional institutions through its newly formed International Financial Reporting Standards University Consortium.