IFRS HealthCheck
Compliance with IFRS is a fundamental concern for all finance functions. So how do you assess whether an ERP platform will readily accommodate IFRS? The questionnaire below sets out some challenging questions and model answers that will help you assess your supplier’s ability to respond to the challenge of IFRS.
Complexity Assessment
1. How often do you change your chart of accounts in response to statutory changes?
Quarterly Annually 2-5 years
2. How many different GAAP regimes does your business have to cope with?
>3 2 1
3. Do you have a standard set of chart of accounts implemented in each reporting entity?
No Yes   
4. How many different general ledger applications does your business employ?
>5 3-5 <3
5. Do you have a homogeneous or ‘Best of Breed’ IT policy?
Best of Breed Homogeneous   
6. Would a change in reporting requirements for IFRS precipitate any changes in the financial reporting process?
Change in data capture from entities Change in consolidation engine only Change in Reporting only
7. Have you identified the main impacts of IFRS on your industry sector and company? Is the IFRS impact on your company expected to...?
Require changes to data captured in operational systems in reporting entities Only require changes in the consolidation engine Only require changes in reporting or simply by corporate level journals
How IFRS change is applied & where
1. When you make a change to a corporate-wide reporting requirement, how is this reflected in the accounts of individual reporting entities?
Changes always made at the entity level, or lowest level of granularity Changes made to individual entity results but at a corporate level only Not at all - adjustment made by a corporate journal
2. Typically, how would you handle (or propose to handle) an IFRS adjustment?
A separate ‘shadow’ IFRS entity A separate dimension A new chart of account line
3. What level of confidence do you have in the capability of your GL systems to rapidly accommodate IFRS changes and separately identify and reconcile them for audit purposes?
Low Moderate High
4. When you make IFRS changes, how easy will it be to reflect these changes in automatic data collection?
Finance team is totally reliant on IT to make changes. Takes more than a week to specify, test and implement Finance team can change data collection templates but need IT to change interfaces – a matter of 1-2 days Finance team can change data collection and interfaces in a matter of hours
Reporting & performance indicators
1. How difficult is it to reflect changes to the chart of accounts structure in operational, statutory and audit reports?
Considerable re-working (coding) of reports drawing on the IT function Some maintenance of reports is performed by finance team Changes in the chart of accounts are automatically reflected in reports
2. How difficult is it to reflect changes in the chart of accounts structure in reports produced via linked spreadsheets?
Many spreadsheets need to be re-written and fully tested Spreadsheets need to be maintained Macros ‘absorb’ changes to chart of accounts
3. Can you handle multi-GAAP reporting without developing new report designs?
No Yes   
4. Can you expose the difference in Key Performance Indicators simply attributable to a change in IFRS?
No Yes   
Who is applying the change?
1. Has the finance function as a whole received training in IFRS and the potential impacts on local systems? How would you estimate their preparedness?
Low Moderate High
2. Would you be able to make changes to information needs, processes and reporting without IT intervention?
No Partially Yes
3. If you need to generate new reports, what level of skill do you need to do so?
Expert external consultancy Expert IT function Business User

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