US firms urged to be cautious about international standards

Ernst & Young partners have warned US firms that they should consider employee implementation costs and skills before adopting international accounting standards.

US companies are not currently permitted to use international financial standards for filing data with the US Securities and Exchange Commission, but a move has been made towards implementing this, Reuters has reported.

Speaking at a conference in New York, Ernst & Young partners said that adopting international standards could be a possibility for US firms that have multiple branches abroad.

As it stands, both US and foreign companies have to convert their financial documents to comply with US standards when filing data with the Securities and Exchange Commission.

Danita Ostling, a partner with the 'big four' accounting firm, said: "The costs will be significant. The effort will be significant."

Osling explained that training would be required for accountants, along with analysts and investment workers, and companies would also have to keep sets of books for a certain length of time.

However, Ostling pointed out that the costs to US companies would not be "at the same magnitude" as the expenses for European firms, which were required to adopt international accounting standards.