The International Accounting Standards Board should abandon its efforts to converge global reporting rules with U.S. accounting standards, and focus instead on making its standards better and less complex, according to a body that speaks for the European accounting profession.
FEE (the Federation of European Accountants) says it supported International Financial Reporting Standards and believed that the IASB’s convergence strategy with U.S. Generally Accepted Accounting Principles (and to a lesser extent, other national standards) had “delivered good results.” But with so many countries now using IFRS, or revising their national standards to align with IFRS, further convergence would be counterproductive as it would only lead to further complexity “with hardly any additional benefit to investors,” FEE said in a policy paper.
Instead, IASB should change its strategy and “concentrate exclusively on major improvements and simplifications in IFRS over the medium term,” FEE said. It wants the Board to work with other standard setters, “so that all stakeholders can be fully engaged and ensure that the quality of IFRS is not compromised.”
"The existing model of convergence is no longer sustainable,” says Mark Vaessen, chairman of FEE’s Financial Reporting Policy Group. IASB should adopt a work plan that sets clear priorities and justified the need for changes, he said adding: “improvements should be made only in areas that really matter."
FEE describes itself as the representative organisation for the accounting profession in Europe. Its membership consists of 43 professional institutes of accountants from 32 countries.
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