Responding to suggestions from European think tank Bruegel, which argued for a European regulator to police interpretations of the new standards, Paul Boyle, chief executive of the Financial Reporting Council, said: ‘This seemed to be based on an idea that we need to promote greater consistency of the application of IFRS. I don’t think that’s necessary.

‘If you have the standards which are principles based, with some rules, then it is inevitable that you will have some differences of application. That’s normal and to be expected.’

Bruegel, which is sponsored by European governments, made the suggestion last week in a review of IFRS, suggesting that such an organisation would have provided guidance for IFRS implementation.

Boyle said: ‘If you want to eliminate differences you will be forced into very prescriptive rules-based standards or standards plus detailed guidance.

‘The search for perfect comparability is mistaken and would lead to a very detailed rules-based approach which is not what we want in Europe.

‘There are market forces at work which will progressively improve the way IFRS is implemented. It is not necessary or helpful to have a very detailed regulatory arrangement,’ said Boyle.

Boyle was however sympathetic to other suggestions of the paper, which criticised the ‘special’ relationship the International Accounting Standards Board has with the American Financial Accounting Standards Board.

The paper’s author, Nicolas Véron, called on the IASB to make itself accountable by giving a formal role to its stakeholders in its governance and to take an uncompromising approach to standards’ quality, by even possibly rescheduling the convergence process with US GAAP, if necessary.

‘We know that persuading the SEC to eliminate their US GAAP reconciliation is a very important short term goal. But in the long term, it’s not appropriate for an international standard setting board to have a unique relationship with one of its jurisdictions. Each jurisdiction should be treated more or less equally,’ said Boyle.