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IFRS Knowledge, Skills, and Abilities: A Follow-UpStudy of Employer Expectations for UndergraduateAccounting MajorsSung Wook Yoon a , Rishma Vedd a & Christopher Gil Jones aa California State University–Northridge , Northridge , California , USAPublished online: 26 Aug 2013.

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JOURNAL OF EDUCATION FOR BUSINESS, 88: 352–360, 2013Copyright C© Taylor & Francis Group, LLCISSN: 0883-2323 print / 1940-3356 onlineDOI: 10.1080/08832323.2012.727889

IFRS Knowledge, Skills, and Abilities: A Follow-UpStudy of Employer Expectations for Undergraduate

Accounting Majors

Sung Wook Yoon, Rishma Vedd, and Christopher Gil JonesCalifornia State University–Northridge, Northridge, California, USA

Although the most recent International Financial Reporting Standards (IFRS) work plan reportfrom the U.S. Securities and Exchange Commission no longer includes a timetable for the U.S.adoption of global financial accounting standards, experts predict that the United States willtransition to some form of convergence later this decade. In anticipation of the likely change,explicit coverage of IFRS was added to the Uniform Certified Public Accountant Examinationin 2011. To identify what it will take for students to become IFRS-ready, this research continuesa multiyear exploration into key IFRS student learning objectives, their relative importance,and strategies for incorporating them into the undergraduate accounting curriculum. Surveyresults suggest employer expectations have evolved.

Keywords: convergence, employer expectations, IFRS, U.S. GAAP, undergraduate accountingcurriculum

As the global economy becomes increasingly borderless, thedemand for a single international language of business hasaccelerated (American Institute of Certified Public Accoun-tants [AICPA], 2011; U.S. Securities and Exchange Com-mission [SEC], 2008). Already more than 12,000 companiesin 120 countries have adopted International Financial Re-porting Standards (IFRS) in one form or another (AICPA,2008). According to the International Accounting StandardsBoard (IASB, 2011, p. 4), “all remaining major economieshave established time lines to converge with or adopt IFRSsin the near future.”

IFRS convergence is under way in the United States, albeitfitfully. On December 21, 2007, the SEC (2007) eliminatedthe reconciliation requirement for non-U.S. filers effectiveMarch 2008. Then in August 2008 the SEC (2008) proposeda roadmap for potential use of IFRS for U.S. financial report-ing. The original roadmap called for a phase in from 2014 to

The authors would like to thank the editor and anonymous reviewers fortheir valuable input, and the staff of the Los Angeles Chapter of the CaliforniaSociety of CPAs for their cooperation and assistance in administering thesurvey.

Correspondence should be addressed to Christopher Gil Jones, Califor-nia State University–Northridge, Department of Accounting and Informa-tion Systems, 18111 Nordhoff Street, Northridge, CA 91330-8372, USA.E-mail: Christopher.Jones@csun.edu

2016, with early adoption for selected registrants as early as2010. But with the financial markets in disarray at the end of2008 and a change in the U.S. presidency at the beginningof 2009 that resulted in a shift in the political landscape, thepace of transition to IFRS has slowed. The SEC (2012) finalstaff report on the Work Plan for the Consideration of Incor-porating International Financial Reporting Standards intothe Financial Reporting System for U.S. Issuers no longermentions a timetable. Experts predict the U.S. will eventu-ally support some form of global financial standard but thetimeline for convergence will be much longer than originallythought (Tysiac, 2012).

A slowing of the pace of IFRS convergence in the UnitedStates may be advantageous for academia. While much ofthe IFRS curricular research has focused on the educatorperspective (Barth, 2008; Connolly & Llanes, 2008; Hor &Juchau, 2004), to date little research, other than our first study(Jones, Vedd, & Yoon, 2009), has examined the IFRS knowl-edge and skill set expectations from an employer’s view. Inan effort to identify what those expectations might be andwhether they have evolved, this research presents a follow-upstudy to our 2008 survey on key IFRS student learningobjectives, their relative importance, and strategies for incor-porating them into the undergraduate accounting curriculum.

Following the brief literature review, we describe our re-search methodology and respondent profile. Then we report

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IFRS KNOWLEDGE, SKILLS, AND ABILITIES 353

findings and offer a short discussion of each research ques-tion enumerated in the literature review section. We concludewith implications for the undergraduate accounting curricu-lum in the United States. Major contributions of this researchinclude (a) an updated summary of employer priorities re-garding key IFRS learning objectives, (b) an analysis of howemployers expectations vary by demographic variable, and(c) recommended strategies for incorporating IFRS into theaccounting curriculum.

LITERATURE REVIEW

Projected preparation levels of U.S. accounting graduatescontrast sharply with employer expectations. With less thana quarter of new grads predicted to be IFRS-ready by 2012(Connolly & Llanes, 2008), public accounting and industryface a shortage of skilled entry-level accountants. Accordingto D. J. Gannon, director of Deloitte and Touche’s IFRS Cen-ter of Excellence, an estimated 40% of the Fortune Global500 already use IFRS and that percentage will significantlyincrease in the next couple of years. A 2008 Deloitte survey ofover 200 senior finance professionals underscored the needfor additional IFRS education in the United States. Sixty-four percent of respondents indicated they lacked enoughadequately trained IFRS professionals for U.S. operations.For non-U.S. operations, the skill shortage was not as pro-nounced; just 34% of respondents felt global accountingskills were inadequate (Deloitte & Touche, 2008). MaryBarth, a Stanford University professor of accounting and for-mer member of the IASB, asserted regarding the transition toIFRS, “The question is how, not whether, it will happen, andhow, not whether, U.S. academics will participate” (Barth,2008, p. 1176).

According to the SEC roadmap, adequate training in IFRSknowledge and skills is an essential precondition for finaladoption of a global standard by the United States (SEC,2008). Unfortunately, as the education and training sectionof the roadmap points out, existing education and training is“limited to or predominantly focused on current provisionsof U.S. GAAP” (SEC, p. 29). The Commission suggests that“colleges and universities would need to include IFRS intheir curricula” (SEC, p. 29).

While academia is still debating whether IFRS should beadopted (Albrecht, 2008; Bahnson & Miller, 2008; Fay, Bro-zovsky, Edmonds, Lobingier, & Hicks, 2008; Taub, 2007;Zeff, 2007), three external forces seem to be shaping theIFRS curricular integration dialog at the undergraduate level.First, the Big Four firms have all launched IFRS curric-ular initiatives (Deloitte & Touche, 2009; Harris, 2008;WebCPA, 2008). PricewaterhouseCoopers went so far asto specify IFRS-awareness levels for new recruits (Nilsen,2008).

Accounting textbook publishers are the second externalforce molding the IFRS integration effort. Wiley, for in-

stance, has offered an online IFRS boot camp designed to“help instructors get up to speed on international conver-gence” since 2009 (Wiley, 2009, para. 1). The third exter-nal (and probably most significant) outside influence on theIFRS curricular integration is the public accounting licensingexam itself. In May 2008, the AICPA expressed its intent toincorporate global accounting standards into the CPA examrequiring candidates to become bilingual in both U.S. Gen-erally Accepted Accounting Principles (GAAP) and IFRS.Beginning in 2011, the Uniform CPA Examination was re-vamped with a new structure, format, and comparative con-tent between IFRS and U.S. GAAP. Under the new Con-tent and Skill Specification Outlines, CPA exam candidatesare expected to identify and understand the differences be-tween financial statements prepared on the basis of U.S.GAAP and IFRS. Candidates are also required to demon-strate proficiency in first-time adoption of IFRS (AICPA,2009).

This new reality puts significant pressure on academicunits providing accounting education. A recent survey ofaccounting departments at 200 universities throughout theUnited States indicated significant change in the interme-diate accounting course sequence is underway in responseto information overload from IFRS integration (Davidson &Francisco, 2009). Additionally, as part of the undergradu-ate accounting curriculum redesign effort, many institutionshave begun to introduce comprehensive research cases re-quiring comparative analysis of U.S. GAAP and IFRS (John-son & Halabi, 2011).

Based on our literature review and results from our pre-vious study, we developed the following research questionsfor further inquiry:

Research Question 1 (RQ1): How important is integratingIFRS in the undergraduate accounting curriculum?

RQ2:What strategy should be used to incorporate IFRS intothe undergraduate accounting curriculum?

RQ3: What relative weight should IFRS and U.S. GAAPcontent be given in undergraduate accounting classesuntil the U.S. converges with (or adopts) IFRS?

RQ4: How important is it for entry-level accounting job can-didates to have a suite of IFRS knowledge and skills (seeTable 1)?

RQ5: Do public accounting firms have higher expecta-tions regarding IFRS competencies than nonaccountingfirms? What about large organizations versus small- ormedium-sized organizations? Or companies with for-eign operations versus companies that only operate do-mestically?

RQ6: Do large organizations have more interest in ExtensibleBusiness Reporting Language (XBRL) for IFRS thansmall- or medium-sized organizations?

RQ7: Do small- and medium-sized organizations expectgraduates to know more about IFRS for “small- ormedium-sized entities” than do large organizations?

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TABLE 1IFRS Student Learning Objectives Categorized by Bloom’s Revised Taxonomy

Student learning objective Revised Bloom’s learning category Taxonomic level

Define the term “International Financial Reporting Standards” (IFRS) Remember 1Compare and contrast IFRS and U.S. GAAP Understand 2Describe the difference between principles-based and rules-based standards Understand 2Describe the role of the International Accounting Standards Board (IASB) Understand 2Discuss the current status of IFRS adoption Understand 2Explain the standard setting process for IFRS Understand 2Read and comprehend IFRS-based financial statements Understand 2Apply IFRS 1 (first-time adoption of IFRS) to an entity Apply 3Apply IFRS in recording business transactions Apply 3Apply IFRS for small- and medium-sized entities Apply 3Prepare financial statements in accordance with IFRS Apply 3Use XBRL markup language for IFRS Apply 3Analyze IFRS-based financial statements Analyze 4Reconcile IFRS with U.S. GAAP–based financial statements Analyze 4Use professional judgment in resolving alternatives under IFRS Evaluate 5

Note. In the original taxonomy, Bloom used noun descriptors for the learning levels (Bloom, Englehart, Furst, Hill, & Krathwohl, 1956); these have beenreplaced with action verbs. Bloom’s learning categories, as revised by Anderson and Krathwohl (2001), are now (a) remember (formerly knowledge), (b)understand (formerly comprehension), (c) apply (formerly application), (d) analyze (formerly analysis), (e) evaluate (formerly evaluation), and (f) create(formerly synthesis). Levels 5 and 6 were swapped. Evaluate, originally Level 6, is now considered Level 5 and create is now Level 6.

METHOD

Survey Instrument and Sample Selection

To address the specific research questions posed by thisstudy, we updated the questionnaire from our initial survey(Jones et al., 2009). The 2008 survey instrument was de-veloped using previous IFRS surveys (Deloitte & Touche,2008; PricewaterhouseCoopers, 2006) and relevant literature(Barth, 2008; Nilsen, 2008) as a guide. The updated ques-tionnaire (available from the first author) was pilot testedwith the department accounting faculty at California StateUniversity, Northridge, and any suggestions incorporated inthe final instrument. During summer 2010, the questionnairewas administered to members of the California Society ofCertified Public Accountants (CalCPA) in the Southern Cal-ifornia region. The Los Angeles Chapter of CalCPA emailedapproximately 10,000 survey requests and collected the sur-vey results. Due to the size of the mailing, CalCPA did notcollect data on returned emails or blocked delivery due tospam filtering. A total of 166 members responded to the sur-vey via web. Frequencies may tally to less than 166 as notevery participant answered every question.

RESULTS

Respondent Profile

Table 2 summarizes demographic information regarding po-sition title, experience, specialization, employment sector,and geographic scope for the 166 useable responses. Thetypical respondent was a senior manager in a local publicaccounting firm with 20+ years of experience. Primary areas

of specialization were either tax (34.3%), audit (24.1%), orfinancial accounting (19.3%).

Compared to the previous survey, respondents in this studymay have been more familiar with international accountingdue to the proportionately higher affiliation levels with na-tional or multinational firms (national: 17.4% in 2010 vs.9.1% in 2008; multinational: 56.5% in 2010 vs. 18.2% in2008).

Research Question 1: Employer Perspectiveon IFRS Coverage

Most survey participants (90.9%) believed that IFRS cov-erage is important enough that it should already be part ofthe existing undergraduate accounting curriculum (Table 3).About a third of respondents reported that IFRS integrationwas very important (18.9%) or extremely important (14.6%).A little more than a third (34.8%) responded that IFRS cover-age was important, with 22.6% of respondents indicating thatcurricular integration was somewhat important. Only 9.1%of survey participants did not feel IFRS should be integratedinto the curriculum at all. Findings are consistent with ourprevious research.

Research Question 2: Preferred IntegrationStrategies

Table 4 presents recommended strategies for incorporatingIFRS into the accounting curriculum. Opinion was divided.A little more than a quarter (27.3%) of respondents wouldintegrate IFRS into all financial accounting coursework, start-ing with the principles course. A slightly lower percentage(25.5%) took a broader view, preferring to integrate IFRS into

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TABLE 2Descriptive Statistics (N = 166)

Demographic category f %

Current positionSenior management 84 50.6Middle management 38 22.9Early professional 21 12.7Other 23 13.9

Years of business experienceLess than 5 years 8 4.85–10 years 15 9.111–20 years 34 20.6More than 20 years 109 66.1

SpecializationAudit 40 24.1Business management 3 1.8Education 3 1.8Finance 6 3.6Financial accounting 32 19.3General management 4 2.4Information systems 2 1.2Managerial accounting 6 3.6Tax 57 34.3Other 13 7.8

Organizational sectorPublic accounting 97 58.4Industry—SEC registrant 23 13.9Industry—Non-SEC registrant 24 14.5Government 4 2.4Not-for-profit 7 4.2Education 7 4.2Other 4 2.4

Public accounting by geographic scopeInternational—Big Four 1 1.0International—Other than Big Four 3 3.1National 3 3.1Regional 5 5.2Local—General practice 64 66.7Local—Specialized 20 20.8

Industry by geographic scopeInternational 26 56.5National (domestic) 8 17.4Regional 6 13.0Local 6 13.0

Note. SEC = U.S. Securities and Exchange Commission.

TABLE 4Recommended Strategies for Incorporating IFRS

into the Curriculum

Curricular strategy f %

Integrate IFRS into all financial accounting courses 44 27.3Integrate IFRS into all accounting program coursework 41 25.5Stand-alone IFRS course 33 20.5Integrate IFRS into only the intermediate accounting series 22 13.7Integrate IFRS into just the international accounting course 14 8.7Other 7 4.3

Note. Table shows responses to survey question, “What strategywould you recommend for incorporating IFRS into the undergradu-ate accounting curriculum?” IFRS = International Financial ReportingStandards.

all accounting coursework. This would mean IFRS coveragein auditing, tax, managerial accounting, and accounting infor-mation systems, in addition to the financial accounting series.About 20% of employers prefer a stand-alone IFRS course,while 13.7% recommend an intermediate-accounting-seriesonly approach. The lack of consensus for a preferred integra-tion strategy parallels our prior survey results.

Research Question 3: Relative Coverageof IFRS Versus U.S. GAAP

Until the United States actually converges with IFRS, the ma-jority (57.1%) of respondents believe more emphasis shouldbe placed on U.S. GAAP in the classroom than on IFRS.Table 5 presents respondent preferences for relative weightsof IFRS/U.S. GAAP coverage in 10% increments. Of thoserespondents favoring more U.S. GAAP coverage than IFRS,the mode was 70% U.S. GAAP–30% IFRS (f = 29). A littleless than one third (31.6%) of respondents would give equaltreatment to IFRS and U.S. GAAP. Only 10.1% of respon-dents felt that more weight should be given to IFRS. Tworespondents (1.3%) felt that IFRS should be covered exclu-sively. In contrast, two respondents (1.3%) felt that only U.S.GAAP should be covered until the United States convergeswith IFRS.

TABLE 3Importance of IASB Curricular Integration

Not importantSomewhatimportant Important Very important

Extremelyimportant

n % n % n % n % n % M SD

15 9.1 37 22.6 57 34.8 31 18.9 24 14.6 3.07 1.64

Note. Table shows responses to survey question, “How important is integrating IFRS into the undergraduate accounting curriculum?” Responses wererated on a 5-point Likert-type scale with responses ranging from 1 (not important) to 5 (extremely important). IFRS = International Financial ReportingStandards.

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TABLE 5Relative Weight for U.S. GAAP Versus IFRS

Coverage

Relative weight f %

100% U.S. GAAP 2 1.310% IFRS–90% U.S. GAAP 18 11.420% IFRS–80% U.S. GAAP 24 15.230% IFRS–70% U.S. GAAP 29 18.440% IFRS–60% U.S. GAAP 17 10.850% IFRS–50% U.S. GAAP 50 31.660% IFRS–40% U.S. GAAP 5 3.270% IFRS–30% U.S. GAAP 6 3.880% IFRS–20% U.S. GAAP 4 2.590% IFRS–10% U.S. GAAP 1 0.6100% IFRS 2 1.3

Note. GAAP = Generally Accepted Accounting Principles; IFRS =International Financial Reporting Standards.

Research Question 4: IFRS Knowledgeand Skills

Survey participants were presented with a list of 15 IFRSlearning objectives (see Table 1) and asked to rate theimportance of each competency for new-hires using a5-point Likert-type scale ranging from 1 (not important) to5 (extremely important). Thirteen of the 15 IFRS learningobjectives were derived from our previous survey researchand were largely based on employer expectations for newhires (Nilsen, 2008). Two new learning objectives wereadded to the questionnaire in response to recent inclusion of

the items in the 2011 Uniform CPA Exam (AICPA, 2009).These two additional learning objectives are “Describe therole of the IASB” and “Apply IFRS 1 to an entity” (IFRS 1addresses first-time adoption of IFRS by an entity).

Table 6 summarizes employer expectations concerningthe 15 IFRS competencies. Learning objectives are listed indescending order by importance mean and given a simulatedrank order. Mean ratings for each learning objective are com-pared side by side with our 2008 study. Results of pairwiset-tests of the differences in the means indicate importance rat-ings of the 13 IFRS knowledge objectives are not statisticallydifferent from the earlier study.

Respondents rated 12 of the IFRS competencies as some-what important (range = 2.00–2.99). Of the 12 learning ob-jectives, two clustered above the midpoint between anchorson the Likert-type scale (2.5); these were (a) describe the dif-ference between principles-based and rules-based standards(M = 2.60, SD = 1.19) and (b) define the term IFRS (M =2.59, SD = 1.30; Table 6). Three of the 15 IFRS competen-cies were rated as not important (range = 1.00–1.99)—applyIFRS for SMEs, explain the standard setting process for IFRSand use XBRL markup language for IFRS.

For the most part, simulated importance rankings for IFRSlearning objectives were comparable with those found in our2008 study. Top-rated IFRS competencies such as (a) de-scribe the difference between principles-based and rules-based standards, (b) define the term “international finan-cial reporting standards,” (c) compare and contrast IFRSand U.S. GAAP, and (d) read and comprehend IFRS-basedfinancial statements were ranked second through fifth in

TABLE 6Importance of IFRS Knowledge and Skills

2010 study 2008 study

IFRS competency Rank M SD Rank M SD t df Bloom’s learning level

Describe difference between principles- and rules-based. 1 2.60 1.19 2 2.55 1.27 0.28 211 2Define the term IFRS. 2 2.59 1.30 3 2.52 1.26 0.40 212 1Compare and contrast IFRS and U.S. GAAP. 3 2.44 1.19 4 2.48 1.31 −0.18 208 2Read and comprehend IFRS-based financials. 4 2.42 1.18 5 2.33 1.24 0.53 211 2Reconcile IFRS with U.S. GAAP–based financials. 5 2.38 1.15 9 2.23 1.29 0.83 208 4Analyze IFRS-based financial statements. 6 2.30 1.17 7 2.25 1.31 0.26 210 4Discuss the current status of IFRS adoption. 7 2.28 1.16 1 2.56 1.20 −1.59 210 2Use professional judgment in resolving alternatives under IFRS. 8 2.23 1.21 8 2.23 1.26 −0.03 210 5Apply IFRS in recording business transactions. 9 2.20 1.18 6 2.27 1.22 −0.40 208 3Prepare financial statements in accordance with IFRS. 10 2.19 1.19 11 2.08 1.32 0.62 210 3Describe the role of IASB. 11 2.16 1.10 N/A N/A N/A N/A N/A 2Apply IFRS 1 to an entity. 12 2.09 1.12 N/A N/A N/A N/A N/A 3Apply IFRS for SMEs. 13 1.96 1.05 12 2.06 1.17 −0.63 212 3Explain the standard setting process for IFRS. 14 1.96 0.99 10 2.21 1.18 −1.57 208 2Use XBRL markup language for IFRS. 15 1.84 0.97 13 2.02 1.16 −1.11 199 3

Note. Sample size (n) ranged from 143 to 150 because several respondents did not answer the questionnaire completely, leaving blank one or moreimportance rating questions. Values for calculation of rating average were rated on a 5-point Likert-type scale ranging from 1 (not important) to 5 (extremelyimportant). For the two items added to the 2010 questionnaire (IASB Role and IFRS 1), t-tests were infeasible; rank, rating average, standard deviation, andt values are labeled N/A for these items. IFRS = International Financial Reporting Standards; IASB = International Accounting Standards Board; SME =small- and medium-sized enterprise; XBRL = Extensible Business Reporting Language.

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IFRS KNOWLEDGE, SKILLS, AND ABILITIES 357

our first survey and first through fourth in this research.Low importance–rated IFRS learning objectives apply IFRSfor SMEs and use XBRL markup language for IFRS werebottom-ranked at thirteenth and fifteenth, respectively, con-sistent with bottom-rankings from our previous survey. Theonly major shift in rankings was the learning objective “Dis-cuss the current status of IFRS adoption,” which ranked firstin our first survey, but ranked seventh in this research. Per-haps the clarification from the SEC in 2010 regarding theSEC convergence work plan made adoption seem more likea nonissue than it was in 2008.

The results of the 2010 survey confirm the 2008 sur-vey findings that employers already expect undergraduateaccounting majors to have a conceptual-level awareness ofIFRS. Where the 2010 survey differs is in the cognitive pro-gression from simple awareness (Bloom’s Level 1) to ap-plication (Bloom’s Level 3; Anderson & Krathwohl, 2001).Employers now expect entry-level accountants to have a rudi-mentary working knowledge of IFRS–U.S. GAAP differ-ences. Based on the results of the 2010 survey, accountingstudents, at a minimum, are expected to be able to (a) definethe acronym IFRS, (b) compare and contrast principles-basedand rules-based approaches to accounting standards, and (c)understand IFRS financial statements well enough to recon-cile to U.S. GAAP. At this time, employers do not expectaccounting undergraduates to account for business transac-tions using IFRS, nor prepare financial statements solelyin accordance with IFRS. Employers have little interest inwhether accounting majors know how to apply a subset ofIFRS to small- to medium-sized entities, work with XBRLfor IFRS, or understand IASB standard setting.

Research Question 5: IFRS CoverageImportance by Employer Type

To answer RQ5 regarding the importance of IFRS cover-age by employer demographic variable, pairwise t-tests wereused to compare mean differences. Results of the inferentialanalyses are presented in Table 7.

Public accounting versus nonaccounting firms. Wehypothesized that public accounting firms (with their focus

on the application of financial reporting standards) wouldplace greater importance on integrating IFRS into the ac-counting curriculum than other accounting employers. AsTable 7 Panel A depicts, the data did not support our hy-pothesis. Public accounting firms assign significantly lowerimportance, t(162) = −2.62, p < .0095, to IFRS coveragein the curriculum (M = 2.8850, SD = 1.1899) than nonac-counting employers (M = 3.3529, SD = 1.0895). One pos-sible explanation is that the majority of public accountingrespondents (87.5%) in the sample were affiliated with lo-cal practices rather than regional, national, or internationalpublic accounting firms. Local firms rarely serve SEC reg-istrants. In contrast, about half of the industry respondentswere from companies required to file under SEC regulationsand guidelines.

Audit specialized versus non–audit-specializedfirms. With a task focus tied to financial reporting stan-dards, we conjectured that respondents specializing in auditwould place greater emphasis on IFRS competence than doother accounting and business specializations. As Table 7Panel B indicates, auditors do report a significantly higherimportance, t(94) = 2.62, p < .0102, for IFRS coverage inthe curriculum (M = 3.3226, SD = 1.0766) than nonauditors(M = 2.6615, SD = 1.1895).

Large accounting firms versus small accountingfirms. By virtue of their current role in the global econ-omy, we hypothesized that large accounting firms would rateIFRS coverage more important than would small accountingfirms. Respondents from large accounting firms (see Table 7Panel C) did, indeed, report a higher importance rating forIFRS coverage (M = 4.1667, SD = 1.0299) than did smallaccounting firms (M = 2.6627, SD = 1.0738), and t-testsrevealed a significant difference, t(93) = 4.56, p < .0001between importance means for these two groups, lendingsupport to the hypothesis that large accounting firms placegreater emphasis on IFRS that do smaller firms.

International companies versus domestic compa-nies. We also hypothesized that international companieswould have more interest in IFRS coverage than domestic

TABLE 7Comparison of International Financial Reporting Standards Curricular Importance, by Employer Characteristic

M SD f M SD f M Difference t p

A. Public accounting firms Nonaccounting firms2.8850 1.1899 96 3.3529 1.0895 68 −0.4779 −2.62 .0095B. Audit specialized Non–audit-specialized3.3226 1.0766 31 2.6615 1.1895 65 0.6611 2.62 .0102

C. Large accounting firms Small accounting firms4.1667 1.0299 12 2.6627 1.0738 83 1.5040 4.56 < .0001

D. International companies Domestic companies3.9231 1.0766 26 2.6667 0.8563 21 1.2564 5.20 < .0001

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TABLE 8Importance of XBRL for International Financial

Reporting Standards, by Employer Size

Large organizations Small organizations

M SD f M SD f M Difference t p

2.1842 1.0096 38 1.7143 0.9283 105 0.4699 2.61 .0099

businesses. As expected, international companies did reporta higher importance for IFRS coverage (M = 3.9231, SD= 1.0766) than their domestic counterparts (M = 2.6667,SD = 0.8563; see Table 7 Panel D). Mean differences in im-portance ratings were significant, t(45) = 5.20, p < .0001.As with large public accounting firms, it would appear inter-national companies do place a higher importance on IFRScurricular integration.

Research Question 6: Importance of XBRLfor IFRS by Employer Size

In 2009, the SEC initiated mandatory XBRL tagging of fi-nancial statements for large capitalization accelerated filers(i.e., common equity float > $5 billion). All other large filerswere required to implement XBRL tagging in 2010; smallerfirms were required to phase in what the SEC calls interactivedata to improve financial reporting in 2011 (SEC, 2009). AnXBRL tag set specific to IFRS is already in use. Given theorder of the XBRL phase-in timetable, we hypothesized thatlarge organizations would have more interest in educationon XBRL for IFRS than small organizations. Table 8 showsthat large organizations (M = 2.1842, SD = 1.0096), did rateXBRL for IFRS coverage more important than small organi-zations (M = 1.7143, SD = 0.9283). Results of a pair-wiset-test of the difference between these two means was signif-icant, t(141) = 2.61, p < .0099, providing support for thehypothesis.

Research Question 7: Importance of IFRSfor SMEs by Employer Size

Both the FASB and IASB are involved in initiatives to pro-vide scaled-back versions of GAAP, dubbed little GAAP. OnJuly 9, 2009, the IASB (2009) published a subset of IFRS de-signed for use by small- and medium-sized entities (SMEs).According to the IASB, SMEs are estimated to representmore than 95% of all companies. Because IFRS for SMEsis designed to serve this constituency, we speculated thatsmall- and medium-sized organizations would place moreimportance on the IFRS for SMEs learning objective thanwould large organizations.

Table 9 presents results from the statistical analysiscomparing the mean importance rating for IFRS for SMEsbetween small organizations and large organizations.Contrary to our expectation, large organizations, in fact,

TABLE 9Importance of International Financial Reporting

Standards for Small- and Medium-Sized Enterprises,by Employer Size

Large organizations Small organizations

M SD f M SD f M Diff. t p

2.2564 1.0935 39 1.8559 1.0167 111 0.4005 2.08 .0397

reported a significantly higher, t(148) = 2.08, p < .0397,importance rating for IFRS for SMEs coverage (M = 2.2564,SD = 1.0935) than did small organizations (M = 1.8559,SD = 1.0167). Perhaps smaller organizations, lackingthe resources of larger entities, are less aware of recentdevelopments in accounting standards targeted to the needsof SMEs. Additional research is needed to confirm this.

DISCUSSION

Limitations

Although the 1.66% useable response rate (N = 166) was typ-ical for a web survey with only a single email request for par-ticipation, external validity of survey results may suffer froma nonresponse bias. A follow-up email to members wouldhave allowed a comparison of first responders to late respon-ders, providing a surrogate for determining whether nonre-sponders would have self-reported differently. Although thesponsoring organization was gracious enough to support thestudy by initiating the emails and hosting the web question-naire, to avoid list fatigue it was understandably reluctant tosend a second email. Nonetheless, this study’s findings are,on the whole, consistent with our 2008 study, both in termsof skill importance ratings and respondent demographics. Inthe 2008 study, the web survey response rate was 23.6%(N = 66). Given that for the most part survey results paral-lel our previous survey (albeit with two additional learningobjectives), we believe the sample was fairly representativeof a cross-section of employers in large U.S. urban areas thathire accounting undergraduates.

CONCLUSIONS

This research presents a follow-up study to an earlier sur-vey on key IFRS student learning objectives, their relativeimportance, and strategies for incorporating them into theundergraduate accounting curriculum. In the 2008 study, thesurvey frame was narrowly defined as employers who havehired or intended to hire four-year accounting undergraduatesfrom a large urban public university located in the greaterLos Angeles metropolitan area for full-time employment

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IFRS KNOWLEDGE, SKILLS, AND ABILITIES 359

and internships. In the follow-on study, the survey framewas expanded; respondents were drawn from the 10,000 plusmembership of the Los Angeles Chapter of the CalCPA. De-scriptive and inferential analyses of the survey data yieldedthe following conclusions summarized subsequently.

IFRS Coverage Prior to Full Convergence

Although the SEC has not yet formally adopted IFRS fordomestic filers, most practicing accountants (90.9%) believecoverage of IFRS is important enough to be included in thecurriculum now.

Curricular Integration Strategies

Opinions on how to incorporate IFRS in the accounting un-dergraduate curriculum are divided. A little over a fourth ofrespondents would embed IFRS in the financial accountingcoursework; another fourth would integrate IFRS into all theaccounting coursework. Still others prefer a stand-alone IFRScourse (20.5%). Somewhat less favored is integrating IFRSinto just the intermediate accounting series (13.7%). The leastfavored integration strategy was incorporating IFRS into aninternational accounting course (8.7%).

Standards Weighting: U.S. GAAP Versus IFRS

With regard to the relative topic weight for the two standards,at this time the majority of employers (57.1%) prefer moreemphasis be given to U.S. GAAP in the classroom than IFRS.Of those respondents favoring more U.S GAAP coveragethan IFRS, the preference is for a 70% U.S. GAAP–30%IFRS split. A little less than one third (31.6%) of respondentswould give equal treatment to IFRS and U.S. GAAP.

Core IFRS Knowledge and Skills

Based on the results of this follow-up survey, it appearsemployers already expect undergraduate accounting majorsto have some conceptual-level awareness of IFRS and arudimentary working knowledge of IFRS–U.S.GAAP dif-ferences. Not unexpectedly, required IFRS competencies areviewed from a U.S. GAAP perspective (GAAP-centric) withIFRS defined in relationship to the U.S. GAAP.

IFRS Importance by Employer Type

As expected, respondents specializing in audit do, in fact, at-tach higher importance to IFRS coverage than nonauditors.Large accounting firms place greater emphasis on IFRS thando smaller firms; likewise, international firms consider IFRSmore important than do domestic companies. At the learningobjective level, large accounting firms consider XBRL forIFRS to be more important than do small firms. Contraryto our expectations, public accounting firms place less im-portance on IFRS coverage than does industry; small firmsplace less importance on IFRS for SMEs than do largefirms.

Implications for the UndergraduateAccounting Curriculum

This study examined the curricular impact of IFRS on un-dergraduate accounting education. Several recommendationsemerge from the findings.

Integrate IFRS at a deeper level. The survey resultsare clear that employers expect today’s undergraduates tohave more than a general awareness of global financial re-porting standards. Graduating seniors should be able to de-fine and describe IFRS, compare and contrast principles- andrules-based approaches to accounting standards, and under-stand IFRS financial statements well enough to reconcile toU.S. GAAP. This exceeds PricewaterhouseCoopers’s some-what progressive recruiting expectation that (a) sophomoresbe able to explain the uses of IFRS and discuss its futureimportance; and (b) juniors and seniors be able to discussthe current status of IFRS adoption, articulate the sourcesof U.S. GAAP and IFRS, describe an example of IFRS fi-nancial statements, and identify and example of a differencebetween U.S. GAAP and IFRS (Nilsen, 2008). Resourcesfor including IFRS coverage at the deeper level suggestedby this study are currently available from the large publicaccounting firms and have recently been incorporated intofinancial accounting textbooks from major publishers.

Employers are ambivalent about which curricular inte-gration strategy to use. Making room in the undergraduatecurriculum for an additional specialized accounting coursemay be difficult given college–university limitations on themaximum number of semester–quarter units allowed in a de-gree program (Davidson & Francisco, 2009). The solutionadopted at our institution was to expand the required inter-mediate series from seven semester units to nine semesterunits and eliminate the stand-alone IFRS elective.

With regard to relative weight given to the two account-ing standards, we recommend devoting 70% of class time inthe undergraduate curriculum to U.S. GAAP, leaving 30%for IFRS. Recent intermediate accounting textbook offer-ings (with their increased IFRS coverage) should facilitatethe move to a higher proportionate coverage of internationalstandards.

Focus on key IFRS exit competencies. The simu-lated rankings of the IFRS knowledge objectives provide agood starting point for curricular emphasis. In the near term,we recommend the top-10 learning objectives be empha-sized with additional attention to the first five: (a) describethe difference between principles- and rules-based standards,(b) define IFRS, (c) compare U.S. GAAP to IFRS, (d) readand comprehend IFRS financials, (e) reconcile IFRS to U.S.GAAP, (f) analyze IFRS financials, (g) discuss IFRS adoptionstatus, (h) develop professional judgment needed to applyprinciple-based standards, (i) record business transactionsusing IFRS, and (j) prepare financial statements in accor-dance with IFRS.

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360 S. W. YOON ET AL.

At or about the time U.S. GAAP and IFRS do con-verge, students should be taught how to apply IFRS 1 (First-time Adoption of IFRS; International Accounting StandardsBoard, 2003). Students would also then be expected todemonstrate an understanding of the international account-ing standards setting process and the role of the IASB. Little,if any, class coverage should be devoted to IFRS for SMEsor XBRL for IFRS.

Help faculty retool for IFRS. Deep integration of IFRScontent is no small undertaking. Big Four firms have taken theinitiative to provide course support material for the massivere-education campaign of existing faculty. Textbook publish-ers have increased IFRS coverage. What is needed now ismore institutional support in the form of release time, facultydevelopment funds, and course redevelopment stipends toupdate existing courses and curriculum. Such support wouldhelp to insure that the growing momentum in academia to in-tegrate IFRS into the curriculum continues as the professionevolves toward a single set of high-quality global standards.

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