Just came back from the soccer field. I was yelled at. There was grumble on the touchline. But in the end the game was fun. It was also safe and fair. It was my job to make it so.
By now most of you realized I was a referee. Not at the World Cup but in Brooklyn U-12 game. I'm no masochist, but I volunteer to be the referee. There are many reasons for that, and mostly I do that for the love and respect of the beautiful game.
Some of you heard my old refrain - IFRSs and US GAAP are like the rules governing the games of soccer and baseball. The first one is called football in my first country and most of the world. The second is the game played mostly in my second country (go Mets!).
In 2009 when the UK's Financial Reporting Council new CEO was presenting his vision for his agency, he made it clear that converging IFRS and US GAAP is not the greatest idea. One is principles based (and 3,000 pages) the other is rules based (and 30,000 pages).
In soccer, there are essential principles and the professionals (referees) who are skilled in using their professional judgement in applying these principles. Just like in the IFRS, principle-based world, there are experienced professionals (accountants and auditors) making a professional judgement. In both cases, the professionals (referees and accountants) train all the time to be on top of their game and make the right calls.
In baseball, there are rules. Many of them. Most I still don't get. There are even special rules for each baseball field since each has some little quirks. Then there are the professionals (umpires) who make sure that the baseball rules are followed. Their job is not easier that that of soccer referees. They have to know all of these rules. But there is less room for the beauty of the game. And when there are no specific rules for a situation - then there is trouble and long discussions. Like with the US GAAP, where you have to know how to find the particular "cook-book" step in the haystack of the 30,000+ pages.
When I started serving the accountancy profession over 15 years ago, I was involved in translating the IFRS into my home country language. If I remember correctly, back then the book had some 1,100 pages. Back then the process of converging the IFRS and US GAAP (by IASB and FSB respectively) was already starting. There is a reason the first book is getting thicker. And while convergence may seem like a good idea, the farther away we move from principles, the harder it will get to remember why the standards are there in the first place. International standards are meant to build a platform of a common language for providing quality, comparable financial information.
I hope that the soccer world will never move towards an excessive use of technology and stopping the game every 18 seconds to review the play from different angles. I also hope that accountants and auditors will continue to have the duty to learn all the time, stay on top of their game, and use their professional judgement based on principles that all can comprehend.