The recent financial crisis revealed substantial shortcomings in financial reporting practices in the public sector underscoring the importance of comprehensive, reliable, and timely financial reporting by governments. There is currently an urgent need to improve governments’ understanding of their fiscal position and prospects, and to provide legislators, markets, and citizens with the information they need to make efficient financial decisions and to hold governments accountable for their performance. Establishing and disseminating high quality accounting standards for the public sector are critical to bringing about this change towards more fiscal transparency.
However, despite the considerable work of the International Public Sector Accounting Standards Board (PSASB) over the last past 15 years to develop and disseminate a comprehensive suite of standards and guidance materials, the adoption of IPSASs by national governments has remained relatively low. Consultation exercises, such as the ones recently undertaken by the Monitoring Group (MG) of the International Federation of Accountants (IFAC)1 and Eurostat2, found that concerns about the governance and oversight of the IPSASB are among the reasons cited by national authorities for not adopting IPSASs.
In this context, an “IPSASB Governance Review Group”, composed of representatives of international institutions responsible for setting and promoting standards for government financial reporting3, was formed in 2013 to consider possible options for strengthening the governance of the IPSASB. The group held its first meeting in Paris on May 31, 2013 to agree on the terms of reference for this review.
Following this meeting, the Review Group has identified a number of options for improving the monitoring and oversight of the IPSASB, on which it is now seeking input from the public.
A consultation paper entitled The Future Governance of the International Public Sector Accounting Standards Board (IPSASB) was published on January 23, 2014. The paper: (i) provides some background on the origins and achievements of the IPSASB; (ii) describes the governance and oversight arrangements of other international standard setting bodies; (iii) discusses the current governance and oversight arrangements for the IPSASB; (iv) makes a series of proposals for strengthening these arrangements; and (v) provides a set of questions for public consultation. All stakeholders, including ministries of finance, audit offices, parliaments, sub-national governments, national accounting standards boards, national accounting institutes, academia, and other concerned entities and individuals, are invited to comment. The deadline for comments is April 30, 2014.
The consultation paper is provided in the attached link: http://www.oecd.org/gov/budgeting/IPSASB-Governance-Review.htm.
3The Review Group is chaired by representatives from the World Bank, the International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development (OECD), and includes representatives from the Financial Stability Board (FSB), the International Organization of Securities Commissions (IOSCO) and the International Organization of Supreme Audit Institutions (INTOSAI).
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