October 1998 Issue


The Year 2000 (Y2K) problem is being effectively addressed by only one in seven countries, reveals a study conducted by the International Federation of Accountants (IFAC, an association of national accountancy organizations). While awareness of the issue is nearly universal, only 14% of member bodies responding to the survey indicated that their countries' public and private sectors were "well prepared" to deal with Y2K.

"With less than 14 months until the next century, most countries have the bulk of their Y2K problems still ahead of them," said Frank Harding, president of IFAC. Responses were received from 56 of IFAC's 140 member bodies, representing 50 countries around the globe.

The results indicate that, while awareness and concern are strong virtually everywhere (98% in the public sector and 96% in the private), much work remains to be done, especially in the public sector. Thirteen percent of respondents--mostly from developing nations--indicated that their countries' public sectors were "not at all prepared" to address the Y2K problem. This concern should come as no surprise. Large public sector organizations tend to rely on old, custom-designed systems; correcting problems in such systems is likely to be very expensive and time-consuming. A lack of preparedness could seriously hamper the conduct of business, especially if utilities or other public services are disrupted.

However, a lack of readiness in small and medium-sized companies also raises concerns. Even large corporations that have their internal Y2K issues solved may yet encounter difficulties if the smaller international partners and associates they rely upon have not addressed the problem.

Several respondents who indicated problems in their country with Y2K readiness cited the lack of economic resources as a reason. Others indicated that businesses and government agencies had grossly underestimated the scope of the problem. *

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