A new report from ACCA (the Association of Chartered Certified Accountants) has called for governments, public sector entities and the accounting profession to work together to assist in the implementation of International Public Sector Accounting Standards (IPSAS) around the world.
The report—IPSAS implementation: current status & challenges—notes that the adoption of IPSAS has the potential to radically change the accounting and financial reporting in public sectors around the world, and particularly in developing countries. However, while adoption is gaining momentum around the world, progress has remained slower than is desirable as adopting countries face specific, complex and consistent implementation challenges.
“The successful adoption of IPSAS can help provide greater clarity on the financial position of public sector entities around the world, delivering greater accountability and transparency, as well as supporting public bodies in improving financial decision making,” said Lindsay Degouve de Nuncques, Head of ACCA Middle East.
“In Abu Dhabi, for example, the Abu Dhabi Accountability Authority (ADAA) announced the formal adoption of IPSAS. They have begun preparing financial statements in accordance with IPSAS for some departments and municipalities, therefore having successfully adopted this standard (currently using cash basis IPSAS).
Furthermore, the government of Dubai in line with Strategy 2021 have stated that they will be adopting IPSAS, as witnessed in the Department of Finance.
“However, our research also draws on the experiences of countries around the world in the process of adopting IPSAS and suggests that progress remains slower than is desirable, which seems to be the case in some countries across the Middle East such as Lebanon and Jordan.”
The report notes that professional accountancy organizations should consider the role they can further play in raising awareness of the need for transparent financial reporting in the public sector, including – and also go beyond – providing training on accounting standards.
“It’s time for governments, public sector entities, the users of financial reports and the accountancy profession to come together to achieve our common goal: transparent financial reports that improve accountability, public sector financial management, and decision-making” concluded Lindsay.
The full report is available here.