Nearly 60% of Caribbean countries included in a recent survey have already adopted International Public Sector Accounting Standards (IPSAS) or national accounting standards based on IPSAS, and the remaining 40% are at various stages of the implementation process according to Accrual Practices and Reform Expectations in the Caribbean, a study conducted by the International Federation of Accountants (IFAC) and the Institute of Chartered Accountants of the Caribbean (ICAC).
This study, the result of an initial survey during the 2016 Strengthening Public Financial Reporting and Accountability conference in the Bahamas, examined the current status of public financial management (PFM) reforms in the Caribbean. It also analyzed the individual countries to assess: (a) the current and future accounting basis and reporting standards for public financial statements; (b) the current and future recognition basis for budgeting; and (c) the current and future external audit requirements for public financial statements.
“Study participants identified areas where stakeholder groups could partner to step up knowledge sharing and collaboration between governments, the accountancy profession, and other stakeholders in the Caribbean,” said Jasmine Davis, ICAC President. “These partnerships may give rise to improved public financial reporting, better informed public decision making, better quality of public services, better management of assets and liabilities, better public financial management, increased accountability, and, ultimately, enhanced trust of citizens in government.”
The study showed that most Caribbean countries are in the process of reforming and modernizing their financial reporting, budgeting, and auditing practices.
- After the reforms have been implemented, the regional balance will move from mostly cash-based accounting to nearly two-thirds using accrual-based accounting. In addition, 60% of those surveyed are expected to have implemented IPSAS while the other 40% will be using national standards based on IPSAS.
- For preparation of the budget, however, most central governments in the Caribbean (60%) still use the cash basis, with only Belize transitioning to accrual.
- Almost all Caribbean countries included in this study already use internationally recognized auditing standards (International Standards on Auditing or International Standards of Supreme Audit Institutions) or national standards based on international standards.
“IFAC has been a driver of change in the Caribbean to modernization accounting systems and move toward more efficient and transparent public financial management. In collaboration with regional and national professional accountancy organizations in the Caribbean, IFAC works to promote conferences, train, and develop cooperation agreements,” said Fayez Choudhury, IFAC CEO. ”The study also suggests that most countries in the Caribbean recognize the importance of high-quality, reliable, and transparent public financial accounting and reporting arrangements and are gradually implementing reforms to achieve these desired outcomes. IFAC, through its Accountability. Now. initiative, together with the ICAC and the various Caribbean national professional accountancy organizations, continues to support this transition.”
A digital version of the report can be found at on the IFAC and ICAC websites.
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 more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.
Since its establishment in 1988, the Institute of Chartered Accountants of the Caribbean has provided a forum for the advancement of the accountancy profession in the Caribbean. Today, with a network of approximately 3,000 professionals, the ICAC is the leading regional organization dedicated to advancing the interest of accountants and professionals in the finance industry within the Caribbean through the promotion of internationally acceptable standards and best practices, thought leadership, research and continuing professional development. In 2006, the ICAC was recognized as an “Acknowledged Regional Grouping” of IFAC.