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  • 1. Latin American Regional Conference Strengthening Public SectorAccounting & Auditing Stephenie Fox Technical Director, IPSASB

2. IFACs Mission

  • To serve the public interest, IFAC will continue to strengthen the worldwide accountancy profession and contribute to the development of strong international economies

IFAC 3. Government Reporting

  • Fiscal accountability of governments enhances economic growth & development worldwide
  • Good financial reporting critical
  • Need clear understandable & reliable information for those who elect, pay tax and invest

IFAC 4. Government Financial Reporting

  • Expect high quality reporting:
  • A ccountabilityspending our money
  • Timely, accurate financial informationtomonitor and manage performance
  • Transparencyengages constituents indemocratic process; engendersconfidence

IFAC 5. Current practice

  • Widespread poor quality financial reporting
  • Imposes burden on economy
  • Disconnect between government response to private sector failures and lack of urgency devoted to improving own financial reporting and management

IFAC 6. Challenges

  • Educating taxpayers Have a right to information about use of their taxes
  • Educating governments Fiduciary obligation to be accountable
  • Use of public funds - a higher obligation/level of accountability owed

IFAC Changing paradigms: 7. Strengthening Public Sector Accounting and Auditing

  • IFAC contributes to governance in multiple ways:
  • Public sector accounting standards
  • External audit
  • Ethic standards
  • Independence standards for professional accountants in government

8. IPSASBs Mission

    • To serve the public interest by developing high-quality accounting standards for use by public sector entities around the world in the preparation of general purpose financial statements

9.

  • Develops International Public Sector Accounting Standards (IPSASs) - cash and accrual
  • Supported/adopted by the UN, World Bank, OECD, NATO and others
  • Facilitates convergence of national and international public sector standards

IPSASB IPSASB IPSASB 10. Rationale for IPSASs

  • Standards-essential to high quality reporting
  • High quality reporting - essential to governmental performance and accountability
  • Governmental transparency- key element of quality of governance
  • Quality of governance-leads to economic growth and all that goes with it

11. IPSASs

  • A foundation for better financial reporting by governments

12. IPSASB

  • 3 meetings per year
  • Open to the public
  • All materials publicly available posted on internet
  • Transparent due process
  • 15 from member bodies; 3 public members

13. Developing Standards

  • Accrual basis standards based on IFRSs
  • Convergence with IFRSs unless public sector specific reason for departure
  • Current hierarchy where no IPSAS exists consider IASB standards or national standards
  • Public sector specific standards
  • Cash basis IPSAS

14.

  • Broad spectrum of practice internationally
  • Availability of resources within jurisdictions
  • Previous limited resources for IPSASB has delayed full standard setting program

Challenges IPSASB 15. Conditions for IPSAS Implementation

  • Acceptance by Government of need for comprehensive financial reporting
  • Effective external audit
  • Independent interpretation
  • Trained professionals accountants, auditors, managers
  • Political will to be accountable

16. Financial Management Reform

  • Main reason for adopting IPSASs: reform of public sector financial management
  • Improve the use and management of all public sector resources cant manage that which you have no information about

17. Benefits of Financial Management Reform

  • Improved information for public sector managers
  • Knowledge is power
  • Better financial reporting:
    • Greater transparency in public sector finances builds trust with the constituency
    • Easier access to international capital markets
    • Cheaper access to capital markets

18. Financial Management Reform

  • IPSASs fundamental
  • Awareness of financial position leads to managing it
  • Need high quality information systems
  • Adoption of IPSASs and accrual basis of financial reporting is critical in financial management reform.

19. Implementing IPSASs

  • Start with cash basis
  • Strong implementation of cash basis a solid first step toward accrual accounting
  • Adopt cash basis and ensure that institutional framework supports this standard
  • Plan adequately for transition to accruals
  • Role of external audit

20. IFAC and IPSASB help by:

  • Assisting with development of accountancy profession
  • Developing public sector accounting standards
  • Developing auditing standards enhance trust
  • Ethics & education standards
  • Providing standards free of charge

21. How are we doing?

  • UN System (28 bodies)
  • OECD, NATO (21 bodies), EC, IFAC, INTERPOL
  • 58 countries have agreed processes or have a project in place to adopt IPSASs or align with IPSASs

22. International Federation of Accountants www.ifac.org