The UK Institute of Chartered Accountants for
England and Wales (ICAEW) said many EU member states have not got
the capacity or capability to implement international public sector
accounting standards and must therefore make a substantial
investment in developing the skills required.

The ICAEW said in its submission to the
Eurostat’s consultation on International Public Sector Accounting
Standards (IPSAS) that the first critical step for members is to
urgently move from cash-based to accruals-based accounting.

ICAEW Europe regional director Martin Manuzi
said there is a need for financial reform in the public sector in
order to rebuild trust and confidence and ensure public sector
finances are sustainable in the future.

“However, many countries in the EU haven’t yet
got the capability to implement IPSAS and must therefore focus on
getting the basics right. Moving from cash to accruals accounting
is a critical first step,” he added.

Manuzi also called for education and further
development of finance skills to be a priority across the EU.

 “Many EU governments still employ
relatively few qualified finance professionals. Attempting a move
to any set of international standards could therefore be hugely
difficult, and thus undermine the political will required to
complete the process,” he said.