Detractors of International Financial Reporting Standards (IFRS) have another arrow in their quiver to help them assail their target. A recent survey by RevenueRecognition.com of senior finance executives in the United States and 34 other countries reveals that IFRS affords no relief from the complexities of revenue processes and isn't likely to lead to a reduction of errors in revenue reporting. And because revenue reporting errors have the greatest impact on financial statements and revenue is companies' biggest fraud risk, that's bad news for U.S. public companies that under the SEC's roadmap would be required to use IFRS by 2014.

According to the survey report, U.S. companies mistakenly believe that because there is much less text in IFRS than in GAAP, especially when it comes to revenue recognition, everything will be easier when they report in IFRS. But according to Gottfried Sehringer, executive editor of RevenueRecognition.com, that's wishful thinking. Sehringer stated in a press release that "[survey] results clearly show the assumption that revenue recognition will get much simpler under IFRS is a misperception," and that while IFRS might offer less specific rules on revenue recognition than GAAP, both are based on the principle of properly reporting the earnings process. "While certain accounting interpretations may change, the complexity of managing the revenue process and its inherent risk will continue to be a major challenge for many companies -- no matter which accounting standard they use."

Companies that seek to improve revenue reporting processes, whether they report under GAAP or IFRS, must overcome fragmentation of revenue data, the report concludes. Survey respondents were asked how many of each type of data source (spreadsheets, ERP modules, custom in-house systems, billing systems, order management systems, project management systems, financial system modules, CRM modules, price books, and word documents)were needed to support an audit. On average, U.S. companies responded 9.6 data sources while international companies responded 9.9.

The more organizations can do to consolidate and improve revenue reporting processes the smoother the transition to IFRS may be. Companies that get their ducks in a row before the SEC throws the IFRS switch will be better able to meet the challenges of the reporting sea change that's coming their way.