AdminCome 2011, and audit committees and board members of Indian companies will have to deal with convergence of Indian GAAP (generally accepted accounting principles) with International Financial Reporting Standards (IFRS), which will have a key impact on their functioning, roles and responsibilities. The audit committees and board members will have to handle this challenge in an effective manner.
IFRS will not merely be a technical accounting conversion. Convergence will impact most business aspects, including structuring of contracts with customers and vendors, performance appraisal parameters and reward plans, and managing external investor relations and communication. Therefore, it will be imperative for governing members to have a detailed knowledge of the impact of IFRS on a company’s business. How will it impact business processes, including the IT system? Is the core team leading the IFRS conversion process adequately trained or not? How will the company communicate the impact of IFRS to its investors and lenders? Will this result in any tax or regulatory issues?
