Improving transparency and sustainability of
public finance globally is an essential task for governments and
financial bodies, according to International Monetary Fund

Speaking at an Institute of Chartered
Accountants of England and Wales (ICAEW) panel discussion IMF
director of the fiscal affairs department Carlo Cottarelli said
comprehensive, clear and timely information is necessary for good
fiscal policy making and for governments to get a better
understanding of their real-time financial situation.

Costarelli explained many countries still fall
short of requirements when reporting to the IMF and it is essential
to improve transparency, make fiscal public reporting more timely
and improve the fiscal forecasting carried out by governments.

European Central Bank (ECB) head of the fiscal
surveillance section Christophe Kamps added that the crisis has
shown how poor frameworks for assessing risk currently are.

“We have seen how contingent liabilities have
become explicit public debt. In some euro-area countries the
problems didn’t build up in the public sector yet have become very
important factors for the planning of public budgets.”

The ICAEW debate highlighted the concerns of
government influence on public finance and how a more long term
approach needs to be taken over the current short term view.

ICAEW president Mark Spofforth said accounting
institutes need to ensure they are building a strong profession
that can withstand some of the pressures politicians might try and
exercise when it comes to public finance reporting.

Kamps emphasised that increased public finance
transparency brings benefits to countries as it often means they
don’t need to reinstate their figures and leads to long term
financial savings.

To coincide with the event in London the event
the ICAEW has issued a report including the views of the IMF, the
ECB and other global public finance bodies stressing the importance
of restoring long-term confidence in public finance.

Spofforth said that in doing so four key
points need addressing: using high-quality data, a shift from
cash-based to accruals-based accounting needs to take place,
financial risks and reporting standards need to take priority and
the pending problem of ageing population needs to be take into
account  when planning long-term public finances.