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