Global survey on accounting and financial reporting by central governments … · Global survey on...
Transcript of Global survey on accounting and financial reporting by central governments … · Global survey on...
Global survey onaccounting and financialreporting by centralgovernments (2nd edition)
14 September 2015
www.pwc.com
PwC
Our ambition
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Why?
What?
How?
Covering four areas:
• Accounting practices• Budgeting practices• IT environment• Finance function
Update on progress since 2012
120 countries surveyed
Part I
Accounting practices
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There is still great diversity in the current governmentaccounting landscape
Cash basis
Modified Cash
Modified Accrual
Accrual basis
31%
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But the 5-year trend toward accrual accounting is clear
Cash basis
Modified Cash
Modified Accrual
Accrual basis
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Do not know (6)
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The dynamic for accrual accounting
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31% of governments apply accrualaccounting now as compared to26% in 2012.
71% of governments will applyaccrual accounting in five years’time (as compared to 63% in2012).
The trend towardsaccrual accounting isconfirmed and evenreinforced
+8%14 September 2015
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The trend is visible across all continents, with the biggestshift expected in Africa, Latin America and Asia
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50%
100%
49%
21%
30%
16%
20%
38%
45%
68%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
North America (n=2)
Oceania (n=3)
Europe (n=35)
Asia (n=29)
Latin America & Caribbean (n=20)
Africa (n=25)
Now
5 years
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The proportion of governmentsapplying accrual accounting thatwill apply IPSAS or similarstandards (IFRS, IPSAS-like)within the next five yearsincreases from 59% to 77%(+18%).
This is particularly remarkable innon-OECD countries.
The use of IPSAS asreference frameworkis expected tofurther increase
+18%
A trend towards international accounting harmonisation
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+18%
The European case - Key learnings from the EPSAS(European Public Sector Accounting Standards) study
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Critical analysis of IPSASas a basis for developing EPSAS2
Proposals for implementation3
Costs and benefitsof implementing EPSAS1
Country visits, questionnaire and interviewswith the 28 EU Member States
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+18%
The European case - Key learnings from the EPSAS study -Benefits
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Accountabilityand
transparency
Betterdecision-making
Controls andadministrative
processes
Labourmarket
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+18%14 September 2015
AM ≥ 70%
40% ≤ AM ≤ 70%
AM ≤ 40%
The European case - Key learnings from the EPSAS study -Central governments
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+18%14 September 2015
AM ≥ 70%
40% ≤ AM ≤ 70%
AM ≤ 40%
The European case - Key learnings from the EPSAS study -State governments
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+18%14 September 2015
AM ≥ 70%
40% ≤ AM ≤ 70%
AM ≤ 40%
The European case - Key learnings from the EPSAS study -Social security funds
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+18%14 September 2015
AM ≥ 70%
40% ≤ AM ≤ 70%
AM ≤ 40%
The European case - Key learnings from the EPSAS study -Local governments
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+18%14 September 2015
Cost to implementEPSAS at the EUlevel assessedbetween
0,009% and 0,053%of the GDP
1,2 and 6,9billion
Decision/need toinvest or not in anew IT system has asignificant impact
Net cost/benefitassessment needed
The European case - Key learnings from the EPSAS study -Cost
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+18%
The European case - Key learnings from the EPSAS study -Suitability of IPSAS for developing EPSAS
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Governments areoverall ratherpositive about IPSAS
Limited number oftopics for whichsome amendmentsor further guidancemay be needed
Governments withadvanced accountingpractices do not wanta step back
IPSAS already usedas a source ofinspiration by mostgovernments
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The European case - Key learnings from the EPSAS study -The way forward
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23%
Diagnostic in eachMember State orgovernment, tailoredroadmap
Continuousimprovementprocess
Best implementationpractices, pragmaticapproach
Focus standard-setting on key issues
Part II
Budgeting practices
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Cash budgeting is still largely used, but accrual budgeting isprogressing
The number of governments reporting under accrual budgeting isexpected to increase from 18% now to 48% in five years (versus from31% to 71% for accrual accounting).
Budgets largelyremain on a cashbasis…
82%
… although an upwardtrend towards accrualbudgeting is identified
+30%
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Part III
IT environment
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A trend towards greater IT integration
The use of ERP-systems is seenas best practice to manage theaccounting, budgeting andreporting processes.
Greater integration of IT systemsis a key priority and a keychallenge for most governments.
% with ERP systemsin next 5 years
64%
15% 20% 15% 11%
Very fragmented Very harmonised
39%
Neither nor
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Part IV
Finance function
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Governments indicate a desire to improve their financefunction
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Desire to improveover the next fiveyears
Major areas forimprovement arefixed assetmanagement,cost accounting,performancemanagement andlong-term planningand forecasting
Main focus oncompliance andcontrol
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Government priorities in the next 5 years
Moving along the maturity spectrum of the government finance function is ajourney and government priorities for the next 5 years depend on their levelof maturity along that spectrum.
lAccrual accounting(based on IPSAS orsimilar) adoption
Greater integration ofIT systems
Capacity building Improvement ofmanagementinformation systems
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Thanks!
Patrice Schumesch,Global Public Finance and Accounting partner,[email protected]
PwC global survey on accounting and reporting bycentral governments (2nd edition)http://www.pwc.be/en_BE/be/publications/pdf/global_ipsas_survey_2015.pdf
PwC EPSAS studyhttp://ec.europa.eu/eurostat/documents/1015035/4261806/EPSAS-study-final-PwC-report.pdfhttp://www.pwc.be/en/publications/2014/epsas_oct_2014.pdf
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