The convergence of accounting standards has become a hot topic for regulators, standard-setters, investors and industry professionals alike.

The European Parliament has been drawn into the debate, after the contentious segmental reporting standard, IFRS 8, raised the ire of shareholders, leading to a provisional halt on the adoption of the standard by the European Commission.

This is despite the adoption of IFRS 8 by the International Accounting Standards Board.

Chairwoman of the Committee of Economic and Monetary Affairs of the European Parliament, Pervenche Berès, has also taken an interest in the issue, along with the Financial Reporting Council's chief executive, Paul Boyle.

Boyle recently suggested the possibility of a halt to the IASB's convergence project and questioned whether two international standards could co-exisit.

The following Q&A constitutes Berès' thoughts on the subject:

What are your views on the Convergence Project, in which the IASB has made plans to converge with US standards?
Some degree of convergence with US standards may be necessary but convergence cannot be an end in itself. IASB cannot and should not have convergence of IFRS with US GAAP as a main objective.

The main objective for the IASB must be to develop international accounting standards that throughout the world and by all stakeholders, in particular the jurisdictions requiring companies to apply IFRS are recognised as being superior and of high quality. IASB should set standards that prepares and users would prefer to use. Standards that standard setters worldwide would wish to move towards.

I think as Paul Boyle, head of the FRC in the UK, recently said at a conference in South Africa that the benefits of one accounting language may not outweigh the costs of getting to one language. Moreover, IASB's focus on convergence consumes the resources that could or should be used to improve existing standards.

Do you have any comments to make on the manner in which IFRS 8 has been adopted by the IASB?
I am aware that IASB consulted widely. Nevertheless, it seemed that the main reason for IASB to change its approach to segment reporting was to ensure convergence of accounting standards. But as I said, convergence cannot be an end in itself. IASB should set standards that prepares and users would prefer to use, in particular those from jurisdictions requiring companies to use IFRS.

Moreover, in the consultation there were a number of investors and others that questioned whether it would be appropriate to move to the so-called management approach. But these concerns seemed to be disregarded because IASB seems to see convergence as an end in itself.

Do you view the manner in which the IASB has embarked on converging with US standards, to be in the best interests of Europe? Please state why.
As I said a certain degree of convergence may be necessary. But the IASB should be very particular when choosing areas where convergence should be sought. Moreover, before setting up any special relations with individual standard setters the IASB should consult, in particular the IASB should ensure that its main customers - jurisdictions that require companies to apply IFRS - also see the need for convergence.

Moreover, there is fundamental difference in approach. US GAAP are rules-based and IFRS principle-based. To my mind, such a fundamental difference sets limits to how far you can go towards creating one accounting language. And again I am not certain that market players need one language.

I can see that market players may need fewer accounting languages than there are faced with now. But as far as I can tell, the process is underway. Many jurisdictions voluntary seek convergence with IFRS. This is good. But convergence is a national choice. And should we end in a situation where there are two accounting languages being applied I am certain that market players, auditors, and accountants, etc, can cope.

Do you believe that the IASB pays enough attention to European standards - or perhaps a disproportionate amount of time and effort spent on converging with the US?
First of all: European accounting standards do not exist. But I do think that the IASB should pay more attention concerns of jurisdictions that require companies to apply IFRS. Moreover, many jurisdictions across the world are moving towards IFRS. IASB should also pay more attention to those jurisdictions.

Yet it seems that the IASB only has eyes for FASB. It does seem rather odd.

Do you believe it is entirely necessary for a single set of accounting rules to be applied, or do you think there could be some merit in two sets of accounting standards co-existing and working in the markets, as they currently are?
For now there are, I think, at least more than 40 accounting languages. There is a merit in having significantly fewer accounting languages. There could be a merit in having two accounting languages being applied. And I am sure they could co-exist. Especially if the two applied accounting languages are underpinned by mutual recognition as agreed in the recent EU - US summit.

Do you think that the IASB, with its Convergence Project, could be in danger of undermining its position as the international standard-setter and perhaps its own efforts towards principled-based accounting standards?
If the IASB sees convergence between principle-based IFRS and rules-based US GAAP as an end in itself, then I do think the IASB could undermine its position.