Question

How does harmonization differ from convergence?

Answer 1

The ultimate goal of both harmonization and convergence is to achieve internation comparability in financial reporting, and both are processes that take place over time. However while Harmonization refers to the reduction of alternative accounting practices in different countries, convergence refers to the process of developing a set of high quality financial reporting standarde toe use internationally, the Until the establishment of the IASB in 2001, the main objective of the IASC was to achieve internation Harmonization in accounting standaeds. Accordingly. the focus was to achieve consensus among different counties with regard to accounting standards. In this process different countries were allowed to have different accounting standards as long as they did not Conflich. for example, The Harmonization progeam of the European Union. Convergence implies the adoption of one set of standard internationally. - (