US convergence under attack

Pressure is mounting on the international accounting standard setter, after
an influential MEP followed one of the UK’s top financial regulators in
questioning the attempt to bring US and international standards much closer
together.

The Financial Reporting
Council’s chief executive Paul Boyle raised his concerns at a recent
shareholder conference, but told Accountancy Age this week that
reservations were being expressed among European standards users about whether
to continue endorsing
IASB and its
convergence work.

‘Some people are concerned the standards may be too heavily influenced by US
standards, and it could lead some to decide to not support what the IASB is
doing,’ he said.

‘It would be very unfortunate at this stage if the EU did not continue to be
fully signed up to IASB standards and it would be a pity if Europe abandoned
IASB standards either because they thought it was politically too close or
structurally too close to the US.’

This week Pervenche Berès, chairwoman of the European Parliament’s committee
on economic affairs, added her voice to growing disapproval.

‘If the IASB sees convergence between IFRS and US GAAP as an end in itself,
then I do think the IASB could undermine its position,’ she said.

Criticism of the standard setter has stemmed from a row that recently erupted
between the IASB and shareholders, who objected to the adoption of IFRS8, which
is identical to a US standard that gives authority over which aspects of a
business executives should report on.

Charities are also opposed to the standard. Christian Aid’s economic and tax
expert Claire McGuigan said: ‘We want to see country-by-country reporting, as
we’re unable

to access tax data where multi-nationals operate, particularly in developing
countries.’