Come 2014, the US will align its accounting practices with the International Financial Reporting Standards (IFRS) – a system of harmonised standards recommended by the International Accounting Standards Board, an independent body of the International Accounting Standards Committee Foundation.
Over 100 countries mandate that companies operating on their soil conduct financial reporting in accordance with IFRS. India is to get on to the IFRS regime in a phased manner beginning next year. The US, which follows its own system – the US Generally Accepted Accounting Practices – will migrate to IFRS from 2014.
Huge biz opportunity
Experts see a huge business opportunity for Indian BPO firms in this migration.
Mr Dolphy D’Souza, IFRS Leader, India – Ernst & Young Pvt Ltd, said the vast number of companies in the US in itself gives birth to a need for outsourcing work related to the migration. The US does not have enough resources to migrate to IFRS on its own, he told Business Line on Monday. “A large chunk of work will come to India.”
But even after the migration exercise is over, Indian BPOs would enjoy business opportunities in terms of “lot of bookkeeping work”. India, Mr D’Souza said, could become the “accounting hub” of the world.
Mr Som Mittal, President, Nasscom, concurs with this view. He said that any compliance issue in the developed world would potentially lead to business opportunities for Indian BPOs.
Mr Mittal sees India doing more and more of value-added work (such as IFRS-related) .
A Nasscom study states that in the three years to 2009, revenues of Indian BPOs grew 30 per cent, while the headcount grew only 20 per cent.