IFRS: The Accounting Profession’s own MacGuffin

I’m a big fan of Alfred Hitchcock’s film North by Northwest.  A critical plot element is the statuette containing a top-secret microfilm.  (Anyone who hasn’t seen the film should see it, and don’t worry I won’t give out any spoilers.)  In the above video, the Master of Suspense himself describes a MacGuffin.

The hero and heroine follow this statuette through most of the film, and yet, the film never gets around to explain what’s on the microfilm, or why it’s so important.  It’s a classic “MacGuffin.”  Wikipedia: “the defining aspect of a MacGuffin is that the major players in the story are (at least initially) willing to do and sacrifice almost anything to obtain it, regardless of what the MacGuffin actually is. In fact, the specific nature of the MacGuffin may be ambiguous, undefined, generic, left open to interpretation or otherwise completely unimportant to the plot. Common examples are money, victory, glory, survival, a source of power, or a potential threat, or it may simply be something entirely unexplained.”

What makes the MacGuffin such an entertaining plot device in a thriller film is that, in spite of the fact that it drives the entire plot of the film, it is often unexplained and sometimes even completely unimportant.

Another great example of a MacGuffin (which I didn’t even realize was a MacGuffin until I started working on this blog) is R2D2 in the original Star Wars film (now sadly degraded to Episode 4).  Heaven forbid, I wouldn’t say that R2D2 is unimportant or unexplained.  And yet, much of the film revolves around a data transmission inside R2D2, a data transmission about which we know very little.  Classic MacGuffin.

I had the privilege of attending a Deloitte presentation on IFRS.  I am embarrassed to admit that, as the presentation worked its way through Financial Instruments and Leases, my mind wandered elsewhere.  That’s when it occurred to me that IFRS is a classic MacGuffin.

Look at the Wikipedia definition again:

The defining aspect of a MacGuffin is that the major players in the story are (at least initially) willing to do and sacrifice almost anything to obtain it, 

Judging from yesterday’s presentation, and the passionate arguments for IFRS as the on and only future of standard-setting, I have little doubt that the big firms will do and sacrifice almost anything to see the US adoption of IFRS.

regardless of what the MacGuffin actually is. In fact, the specific nature of the MacGuffin may be ambiguous, undefined, generic, left open to interpretation 

IFRS is, as yet, not ready for prime time.  Going through the specific standards, no one can say (with a straight face) that IFRS is sufficiently developed to become US GAAP.  Many of the standards haven’t yet been written, and no one can say what they will look like in the US.

or otherwise completely unimportant to the plot. 

I have yet to hear a coherent explanation of why the US should switch over to IFRS.  I hear a lot of “level playing field.”  But what is that?  There’s no such thing as a level playing field.  Every country is different.  Every country has it’s own legal environment, its own financial markets, its own economy, its own information environment.  Every country is different.  That’s life.  Any differences between standards can easily be explained through disclosure.  Here is the question: Do the benefits of IFRS adoption exceed the costs?  A common answer I’ll hear is that “it’s inevitable.”  But that doesn’t answer my question!  Do the benefits exceed the costs?  I’m still waiting for a good answer.

Few people today would argue with me that the greatest problem in accounting today is the lack of transparency.  How would IFRS adoption solve this problem?

Common examples are money, victory, glory, survival, a source of power, or a potential threat, or it may simply be something entirely unexplained.

So here we are, on the road to oblivion.  I am proud to admit I came up with a cute expression: 

There are many IF’s in IFRS.  

If we can harmonize/converge/endorse/condorse the standards (condorsement????).  
If the litigious US legal environment can change to become hospital to principals-based standards.  ‘
If we are willing to give up sovereignty over our own standards.  
If IASB adopts more open governance.  
If investors are willing to tolerate a “report whatever income number you want” GAAP.  
If companies are willing to pay for this.

It’s a great plot, I can’t wait to hear what happens next.  


About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.


  1. I think the recent Shyam Sunder's essay in Accounting Horizons also makes a cogent case against the IF's of IFRS.He also wrote a wonderful article in another journal, Accounting, Economics and Law, a Convivium titled "Imagined Worlds of Accounting." Which appeals to me given i still remain bi-cultural even now–literature and accounting keeping getting intertwined in my mind. I remain an outlier in accounting even after being in the folds since 1977–the year my dissertation on Kipling got deposited in the libraries–Washington State's and the Library of Congress. Wherein i accounted for Kipling's empire by showing it has much less to do with social darwinism and racial prejudices of British imperial functionaries than it does with St. Paul's vision of a Commonwealth of Jesus inhabited by both Jews and Gentiles where they maintain their respective ethos. That I could make a case like this without an in-depth knowledge of New Testament may be seen as Chutzpah. There was a feeling among the students and faculty at Washington State U back in 1970's that i must be a bible geek. all because a phrase from an Ingemar Bergman movie seen in the frozen tundra of north dakota in the 1960's about seeing through the glass darkly stuck in my mind and came back when i read an edgar allen poe's story that had a phrase in it about "seeing through the smokey panes." i followed up the connection, turned out the whole paragraph was a direct adaptation of St. Paul's famous "through the glass darkly" passage. That insight was very new–nobody had noticed it till then. However that made me an instant New Testament celebrity even to the point that( in those Pre-Post Colonial days when a great many english profsssors did not think a non-native speaker of english should aspire to gradaute studies in english literature–never mind that English literature as college discipline got started in the Colony as a surrogate for Bible; they could not teach Bible but relied on Milton's Paradise Lost for the same result and now Man Booker Prize all too often is awarded to the desis) a faculty member, a veritable name in American literature of 19th century, tried to trip me, Virginia is quite sure about this,we were in the phd paper chase togather) by asking me to answer about the grotesque in the Bible in my qualifying written exam. in any case, I think the whole IFRS is about lowering the labor cost by the capitalists.

  2. PS. Kipling wrote a poem titled "IF" which almost seems like the anthem for the scouts and is still recalled by many according Miriam Murtuza's dissertation.All those if's in your post reminded me of the poem.the idea also shows as the phrase "when the snow melts, when the thaw breaks, and when the spring comes in the novel of Daphne Du Murier, the author of the novel which led to Hitchcock's Rebecca.the idea also shows up in Shelley's phrase–If winter comes, can spring be far behind. with the global warming spring may never come in Maldive and Bengla Desh, quite possibly.

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