International Public Sector Accounting Standards (IPSAS)

Time to update your accounting system

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The global financial crisis has demonstrated that high quality accounting and financial reporting standards are crucial for the public sector.

Stakeholders show increasing demand for transparent, reliable and useful information from governments and their agencies.

Around the world, accounting and financial reporting in the public sector is practiced in diverse ways and one struggles to obtain comparable information in terms of accountability and transparency.

International Public Sector Accounting Standards (IPSAS) help present an accurate and fair view of the financial positions, financial performance and cash flows of central, regional and local governments, as well as super-national organizations.

As a result, users will gain access to fuller and more transparent information about the financial consequences of political decisions, as well as the financial situation of their jurisdictions.

Conversion to IPSAS requires a disciplined and thorough approach.

Key issues involved in a conversion to IPSAS

Implementation of an accrual-based accounting system

  • IT implementation
  • Restructuring of the organization and administrative processes to make them IPSAS proof
  • Project and change management
  • Skills and knowledge transfer

Shift in public sector governance

  • Emphasis on accountability
  • Transparency
  • Auditing of accrual-based financial information

Political dimension of IPSAS

  • Better accounting information leads to better informed policy decisions

Benefits of adopting IPSAS

  • Better national/international comparability and consistency of financial information
  • Focus on public-sector-specific issues in financial reporting
  • Transparency in government accounting and financial reporting which influences government’s cost of refinancing
  • Enhancement of accountability and oversight control
  • Better decision-making and improvement of assets and liabilities management
  • Better recognition of risks, opportunities, cost awareness and efficiency
  • Improved government finance statistical information

Challenges to overcome

  • Balancing of internal and external capacities throughout the implementation project
  • The lack of knowledge and implementation experience
  • The long timeline to convert to a new accounting system
  • Resistance to required organizational changes
  • The lack of proper financial accounting systems and IT platforms to track, capture and report data required for compliance with IPSAS

 

Our deep understanding of the challenges involved in such a conversion process, our project management skills together with our extensive technical knowledge of IPSAS and the ability to offer customized training, ideally place us to help public sector organizations and international (not-for-profit) organizations around the world to prepare for and manage the transition to these new reporting standards.

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