The International Federation of Accountants (IFAC) has urged the G20 to take action against inconsistent and unreliable public sector financial reporting.
The issue was addressed in a letter to the G20 deputies and Finance Ministers at their April 2012 meeting in Mexico, in which IFAC recommends the G20:
- To encourage the Financial Stability Board (FSB) to consider institutional changes which are needed in public sector financial management to protect the public and investors in government bonds;
- To foster the establishment of a working group within the FSB architecture, which is specifically tasked with examining enhanced public sector financial reporting, transparency and accountability;
- To facilitate the adoption of accrual-based accounting by governments and public sector institution; and,
- That the G20 encourages FSB to include International Public Sector Accounting Standards as a set of standards key for sound financial systems and deserving of timely implementation.
IFAC chief executive Ian Ball said the sovereign debt crisis has given rise to a significant number of policy developments at an international level but this issue has yet to be adequately addressed.
“The use of international public sector standards by governments worldwide will improve the quality of financial information reported by public entities, which is critical for investors, taxpayers, and the general public,” Ball said.