Despite coming into effect from January 2015, it has emerged following the results of a recent study that a significant number of finance departments are still not ready to begin using the new reporting framework FRS 101 and 102.
Just over a quarter of the accountants questioned were uncertain as to whether their firm currently satisfied the new regulations, around half said they had not even begun to consider the change, and – perhaps most alarmingly of all – less than one in ten of those who responded were confident that they had the in-house skills needed to be able to successfully put the changes into action.
“Considering the notice period that was given for these changes to GAAP to include FRS 101 and 102, we were surprised to find such a large number of corporate accountants still aren’t compliant”, said chief executive of leading financial software developer IRIS, Phill Robinson.
“Although the repercussions of non-compliance can vary, failure to comply with the current financial reporting standards would be problematic for both the organisation and any accountancy firms acting on their behalf.”
The results of the survey will come as a shock to some, and suggest that many firms either do not realise the implications of failing to switch to FRS 101 and 102, or are unaware that any major change needs to take place in their financial practices.
FRS, or the Financial Reporting Standards, replaced the UK GAAP for the accounting periods which started on or after 1st January 2015. The reasoning behind the move to FRS is to bring UK accountancy practices closer in line with the EU-adopted IFRS.
If you or your finance department are worried about the move to FRS and whether you are ready to implement the new rules, please get in touch with us for help and advice.