Australian Securities and Investments Commission (ASIC) Chairman Jeffrey Lucy has spoken out about the new International Financial Reporting Standards (IFRS), saying that companies and the regulator will have issues with adapting to the legislation, which comes into effect on January 1 2005.

Fairfax newspapers said Mr Lucy told the G100 National Congress – a meeting of business executives in Sydney – that the IFRS, which are being introduced in a bid to achieve international consistency with accounting standards, are producing several new challenges for companies.

He said ASIC is also having trouble overseeing companies as they make the transition between the old and new requirements. The new changes make it imperative for ASIC to retain “an acute sense of particular risks in the market” in order to regulate effectively.

Mr Lucy said CLERP 9 and growing consumer involvement in the funds management industry posed new challenges. “Indeed… the global collapses or difficulties of entities like HIH, Enron, WorldCom and Parmalat have also moved regulatory issues higher up the public agenda.”

Mr Lucy said ASIC’s National Insolvent Trading Program involved 649 surveillance visits and resulted in 71 companies appointing voluntary administrators or liquidators.