In his main role, as chief finance officer at AstraZeneca, one of the world's biggest pharmaceutical companies, he started preparing for the changes nearly a year ago. As well as preparing for the new IFRS system, AstraZeneca has formulated a detailed plan for communicating the new system's impact on its business, which will be delivered to the market in a few weeks.

All this may seem a rather premature reaction to standards that are not due to come in until next year, particularly since some of them have not yet even been finalised. But Symonds says the task of getting ready for the changes is such that companies cannot start preparing for them too early.

"This is a completely new financial language," he says "Preparing for the shift is a massive logistical exercise. Five years of annual financial numbers, as well as figures from eight quarters have to be restated. This is a staggering number of spread sheets that have to be redrawn, forecasts to be restated and impact assessments that have to be made.

"We have spent the past few months preparing all the people who deal with financial information. Every one of these employees — of whom there are about 1,000 — have been placed on specifically designed training courses.

"Communicating the changes is just as big a challenge as preparing for them internally," he says. "The onus is on companies to educate investors on what these changes mean. Explaining to the market why they will be presented with two different sets of numbers for this year's performance, even though basics like cash flow have not changed, is going to be tough. It is all a huge amount of work."

Since this is the message coming from companies that started preparing months ago, experts are concerned about those that have barely started. A recent survey by financial services firm PwC concluded: "The vast majority of the 310 companies surveyed still have a lot of work to do to make the changes to IFRS." The Committee of European Securities Regulators (CESR) tried to issue a wake-up call by asking finance directors to provide markets with appropriate information in a phased process. It said companies should provide details of the key accounting differences between IFRS and the previous system, a timetable of the transition from one set of standards to the other, and an explanation of what impact the changes would have on their business. CESR strongly recommended that this information be provided as early as possible. The lack of response from business has caused great concern among European regulators and accounting experts, although the lack of action is understandable given the degree confusion over what exactly needs to be implemented.

Even so, the International Accounting Standards Board (IASB) confirmed in March that it had reached a "stable platform" with the vast majority of standards required as mandatory in 2005 issued.

The IASB and European Commission expected the new certainty to trigger a rapid response from companies. Unfortunately this hasn't happened in quite the numbers, or the with the enthusiasm, they had hoped for.

But now analysts and investors are getting uneasy about the changes, too, and are calling for more information on IFRS. As PwC said recently, "If companies are unable to demonstrate during 2004 that they have 'IFRS 2005' under full control, they risk damaging themselves in stakeholders' eyes . . . Companies must now forge ahead with their plans and make fast progress in the next few months."

PwC urged senior managers in every company to appoint a high-level steering committee to co-ordinate, oversee and take responsibility for the IFRS transition project. Chief finance officers will inevitably bear much of the burden, and will be responsible for key deadlines and making sure the new reporting system is robust.

Similarly, significant resources must be allocated to the transition project. Every new accounting standard needs to be looked at and its potential impact assessed. Managers need to understand that as well as headline financial figures, the new system may also affect bonus and reward schemes, treasury operations, tax liabilities and debt covenants. There is a mass of information to plough through — a process that will take time and money.

Symonds took the courses one step further at AstraZeneca: "Because of the importance of the transition, we have not only taught our people the changes that are coming in but have run the courses as an excuse to revise the old accounting standards, too, for extra understanding. It is critical that everyone knows the changes and understands. I am now confident that this is the case at AstraZeneca."

To make the transition smoother, advisers say firms should make IFRS the basis of internal management reporting as soon as possible, so that it becomes "business as usual". Another headache for management is to ensure the standards meet other reporting requirements, such as Sarbanes-Oxley, as well as the raft of new corporate governance codes in the UK. Understanding and preparing for the changes within a company is only one part of the overhaul. Communicating the changes to the market is just as important, and can be time-consuming.

Ian Dilks, partner responsible for IFRS conversion services in the UK at PwC, says: "The challenge for companies is to avoid 'surprise' changes when reporting under IFRS for the first time, to reduce the potential risk of adverse market reactions. Communication does not begin with the publication of 2005 annual statements: companies should have already opened the dialogue with the investment community to help it understand the likely impact."

Senior managers need to devise a thorough programme of meetings with analysts, investors and commentators. They need to explain clearly each of the new standards that will affect their reporting, how big the impact is and when the market should expect these changes to occur.

In addition, throughout the process managers need to convince the market that the changes being made are not an indication of financial instability. Without due care, the introduction of the new system could cause huge confusion and result in large damages — not just financial, but to reputations.

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