IFAC Welcomes IMF Paper on Fiscal Transparency, Accountability, and Risk

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    Nov 28, 2012
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    IFAC Welcomes IMF Paper on Fiscal Transparency, Accountability, and Risk

    The International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 129 countries and jurisdictions, today welcomed the recent release of the International Monetary Fund (IMF)’s paper, Fiscal Transparency, Accountability, and Risk. The paper highlights the seriousness and extent of the current inadequacies in governments’ fiscal reporting and accountability. It also underscores the immense risks associated with these shortcomings.

    In particular, IFAC welcomes the IMF’s support for the International Public Sector Accounting Standards, the globally accepted, high-quality accrual-based standards issued by the International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting body. These standards promote greater transparency and accountability in public sector finances and allow for enhanced monitoring of governments’ fiscal positions.

    “The current sovereign debt crises have starkly revealed the deficiencies in many governments’ reporting practices and consequently their understanding of their actual fiscal positions,” said Ian Ball, IFAC CEO. “IFAC believes that governments around the world must implement necessary institutional reforms to strengthen governmental financial management, and thereby protect the public, as well as investors in government bonds. This will better allow governments to anticipate and manage fiscal shocks, and also help reduce the risk of future debt crises. IFAC applauds the IMF’s work in this area to support the aim, which we share, of strengthening public sector financial reporting and financial management.”

    IFAC supports the key positions presented in this paper. Specifically, IFAC recognizes the importance of:

    • Updating fiscal transparency standards to address gaps in, and inconsistencies between, individual jurisdictions’ standards;
    • Complying with international standards for public sector financial reporting, including reporting all assets and liabilities by, for example, using IPSASs;
    • Including all entities that have fiscal implications for governments (including central banks, public entities, and corporations outside of the general governments) in fiscal forecasting, budgeting, and financial reporting;
    • Evaluating countries’ compliance with fiscal transparency standards using, for instance, auditing and assurance as a means for assessing compliance with standards;
    • Strengthening incentives for improvements in fiscal transparency practices;
    • Strengthening the institutional relationships among international standard-setters;
    • Aligning the methodologies and standards for fiscal forecasting, budgeting, and financial reporting to reinforce the links between fiscal transparency and long-term sustainability;
    • Building the capacity of professional accountancy organizations and promoting the role they play in improving government financial reporting practices; and
    • Strengthening fiscal transparency and public sector financial management in all nations and, in particular, in developing and emerging nations.

    About IFAC
    IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 173 members and associates in 129 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

     

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