Consistent approach urged for global public sector financial reporting

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Key Points

  • Economic instability is heightening the demand from global investors for greater accountability within government finances
  • The launch of 'It’s time...for global high quality public sector financial reporting' follows an announcement by the G20 earlier this year that the IMF and the World Bank would pursue issues within public sector reporting
  • The Institute is calling for transaction-neutral global financial reporting standards, to be achieved through the integration of public and private sector reporting frameworks.

The emerging consensus that improvements in the quality of public sector financial reporting globally are urgently needed is the basis for a new thought leadership publication, It’s time…for global, high quality public sector financial reporting.

Written by a former member of the International Accounting Standards Board (IASB), Warren McGregor, the publication questions the disparity between the standard of financial reporting in government administrations and that of private sector organisations.

According to the Institute’s Head of Reporting Policy, Kerry Hicks FCA, the timing of the paper expands on an announcement by the G20 earlier this year that the International Monetary Fund and the World Bank would be pursuing the issue of transparency and comparability of public sector financial reporting as part of the goal to strengthen balance sheets.

This in turn will lead to improvements in investor confidence which is critical to the efficient and effective operation of global markets.
 
‘Investors in both the private and the public sectors need, and insist on, access to information that has been derived in a comparable, transparent way. Integration of the private sector model with the public sector model, will enable improvement in public sector financial reporting on a transaction neutral basis more efficiently than the current model,’ she says.

In releasing the publication, the Institute seeks to encourage regulators and standard-setters to work towards high-quality, transaction-neutral, global financial reporting standards. This should occur through the transformation of the IFRS Foundation to include the public sector reporting in its remit, incorporating the IPSASB into its activities, and ensuring the Foundation and the Monitoring Board have public sector members. 

Article last updated 15 August 2014

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