Convergence talks with US authorities should be abandoned by the
international accounting standard setter, which should instead focus on
perfecting existing global standards, a European body has said.
The Fédération des Experts
Comptables Européens, which represents more than 500,000 accountants across
Europe, said the
Standards Board should cut its losses and walk away from its US-GAAP
The statement adds to the growing concern regarding the IASB’s focus on US
adoption of global standards.
There are mounting fears the negotiations are distracting the board from its
core task of maintaining international accounting rules.
FEE believes the IASB should change direction and instead ‘concentrate
exclusively on major improvements and simplifications in International Financial
Reporting Standards over the medium term’.
‘The point has been reached where there are diminishing returns from further
converging with US GAAP, in particular now that more and more countries,
including major economies such as Japan and India, move towards direct adoption
of full IFRS,’ the body said.
Only last week Paul Boyle, Financial Reporting Council chairman, echoed the
concerns and said it was not clear ‘that convergence between IFRS and US GAAP is
the best strategy for improving IFRS’.
‘The costs of convergence are quite high… It will be interesting to see in
six to 12 months whether convergence remains a realistic option,’ he said, in
response to questions at the FRC’s annual general meeting.
David Phillips, PricewaterhouseCoopers senior corporate reporting partner,
said there ought to be more discussion about the IASB’s role. ‘We should have a
balanced debate about the forward agenda and make sure we get the balance
between convergence and enhancing the reporting model right,’ he said.
It’s the latest blow to the IASB’s convergence strategy. In January, comments
by SEC chairman Mary Schapiro stoked concerns surrounding America’s commitment
to global standards. Meanwhile, the SEC has still not appointed a replacement
for chief accountant
Conrad Hewitt whose position is central to convergence discussions.
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