PRESS RELEASE
31 July 2009
A DELAY in the rollout of new accounting standards for SME’s threatens to leave Ireland’s small and medium businesses lagging behind the rest of Europe.
The new regulations, designed by the International Accounting Standards Board (IASB), are specifically tailored to SME’s and reduce the potential burden of financial reporting red tape on business owners by up to 90 per cent.
Patrick Burke, Partner at Grant Thornton said: “Nearly 180,000 firms in Ireland will benefit from this new reporting standard which can reduce the book of accounting standards from 3,000 to 300 pages.”
“These regulations are drawn up and ready to go – the sooner we implement them here in Ireland the sooner businesses can start saving money by cutting down on red-tape.”
A recent worldwide study by Grant Thornton showed that one in five Irish businesses rated red tape as a significant constraint on their business.
The survey placed Ireland tenth-best among 36 countries when it came to regulations hampering business.
“Ireland has an opportunity to move to the top of this list and draw level with the Scandinavian coutries if we can implement this new standard for firms,” said Burke.
The professional institutes and universities adjusted their syllabuses to the new International Financial Reporting Standard (IFRS) a number of years ago.
“Government, business groups and accountancy bodies need to get together and pin down a date for implementation – this cannot be put on the long finger,” said Burke.
A large number of international operations with holding companies here in Ireland are expected to benefit from the new rules.
“If Ireland can move first on this it will go some way to re-establishing its reputation within financial circles,” said Burke.
As the new regulations become standard procedure throughout the world, the new IFRS for SMEs will facilitate international transactions.
“In the past, Irish companies acquiring foreign businesses would have had to spend time investigating local reporting and then international reporting which necessitated running two sets of reporting systems.
“With one standardized system in place the expense of hiring accountants to investigate international transactions will be greatly reduced,” said Burke.
”Like all transitions to new regulatory standards, it is not something that can be rushed.
“Businesses will need to make minor changes to their internal processes in advance of adoption and need clarity on the implementation date to plan for this,” said Burke.
ENDS