The Securities and Exchange Commission recently published its proposed road map outlining the steps required for conversion from generally accepted accounting principles to international financial reporting standards.

The release moves us closer to a single set of universally accepted accounting standards.

Many U.S. banks have already begun to analyze the likely impact of a conversion, and though there is a great deal of discussion and awareness of the similarities and differences between the standards, many misconceptions exist. Here is a look at six of the most common myths — and why believing them could hurt financial services organizations.

Myth one: The international standards will never be required in the United States, or at least not during the next decade. Recent SEC activities have shortened the path to a U.S. conversion, making the adoption of the international standards a matter of when and how, not if.

A significant majority of the Global Fortune 500 companies, except for those in the United States, will be reporting under the international standards by 2011. Can the U.S. market stay competitive and the SEC remain influential within global capital markets if the United States is not using these standards? Both would be difficult if the U.S. is not on a common reporting platform.

Those opposed to it cite various hurdles such as the inability to train preparers, users and auditors, the significant cost of conversion and the possibility that the amount of judgment inherent in the standards could open the door to litigation.

In the end, regardless of the hurdles, the global capital markets will demand compliance with international standards, which will benefit all participants.

Myth two: We have plenty of time. Though the exact dates for conversion have not been finalized, the proposed time line of 2014-2016 indicates that preparations should start now.

When considering how much there is to do, it quickly becomes apparent that this is a multiyear endeavor. Here are some key activities related to a conversion that underscore the need to begin right away: providing two years of comparative financial statements; restating virtually all existing activity at transition; modifying processes and technology throughout the organization; assessing and, where appropriate, altering how business is conducted and monitored.

Efficiencies can be gained and savings realized when the impact of the international standards on long-term activities is evaluated today.

Myth three: This is just an accounting exercise; so what if the accounting rules change? Business strategies and operations will run just as before, right? Wrong.

The fact is that the changes will have ripple effects across the entire organization. It may begin with accounting, but a conversion rapidly reveals the need for essential changes in business processes and systems to capture new data and satisfy reporting requirements.

The standards influence how financial products will be structured, what investors will need to know and how activities are monitored. They also affect any area of a business that uses financial metrics to achieve its ends; in some cases, they may require adjustments now.

Myth four: We can do this in our spare time. The necessary changes and recalibrations could be extensive. This is not something that will happen in the ordinary course of business or through a series of episodic, ad hoc measures. Organizations need to plan systematically for the changes.

Myth five: Because the rules are principle-based, we can interpret them more broadly. With GAAP, the lines of practice are clearly drawn. However, the principle-based approach of the international standards forces one to use judgment and evaluate the substance of a transaction. Some detractors categorize this aspect as "open to interpretation," but the truth is that fewer bright lines reduce the possibility of structuring for accounting purposes.

Myth six: We can do what we did with statutory reporting conversions. Up until now, various statutory locations often converted to the international standards with little or no involvement from the parent. Policy decisions may have been made independently without considering the impact on the entire organization, but an enterprisewide conversion must take into account policies across business lines and geographies.

The world is embracing the international standards. The benefits of simplifying comparisons among global investment opportunities, as well as the ability to eliminate duplicative reporting environments, will continue to spur the U.S. movement toward harmonization.

We are past the days of believing that the global accounting language would be GAAP, and the United States cannot afford to be an outlier.

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