Ian Ball (IFAC CEO) Visits the IMF to Discuss the Role of Accrual Accounting in Government Financial Reporting and Fiscal Management
Posted by Abdul Khan
“Accrual concepts are fundamental to both Economics and Accounting” said Mr. Ian Ball, the Chief Executive Officer (CEO) of the International Federation of Accountants (IFAC), the worldwide organization of the accountancy profession. In a well attended and lively seminar of Fund and World Bank staff on Thursday, May 23, Mr. Ball argued that accrual based accounting provides better information, be it to assess the impact of the public sector on the economy, enhance transparency to citizens or tax payers, or facilitate management decisions on resource allocation.
Mr. Ball explained the organization and role of IFAC, with particular emphasis on its work through one of its Boards, the International Public Sector Accounting Standards Board (IPSASB), which develops standards for use by governments in preparing their financial statements. More than seventy countries have agreed processes or have a project in place to adopt or align with IPSAS. In addition, IPSAS have also been adopted by international bodies such the UN system, OECD, the European Commission, and NATO, Mr. Ball said.
Development of a conceptual framework for public sector financial reporting, harmonizing IPSASs with the Fund’s Government Finance Statistics (GFS) standards, and convergence of the public sector standards with the private sector’s international financial reporting standards (IFRS) were among the strategic themes of the IPSASB, Mr. Ball explained. He also indicated that some of the major projects on which the IPSASB was currently working would be of great interest to the Fund and the World Bank. These include accounting for social benefits, reporting on long term fiscal sustainability, narrative reporting and performance reporting, and a review of the cash basis standard.
Mr. Ball concluded by calling for continued strategic cooperation between IFAC and the Fund to further align accounting and statistical standards and consider the options for including IPSAS in the Code of Good Practices on Fiscal Transparency, the Fund’s transparency standard. He also suggested that the two organizations could meet annually to discuss strategy for continuing cooperation.
Further readings:
Transition to Accrual Accounting -- IMF Technical Guidance Note
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