Magazine article Public Finance

On Account

Magazine article Public Finance

On Account

Article excerpt

PUBLIC SECTOR ACCOUNTING has been through a lot of changes, from the move to accrual accounting some years back to the current big step to adopting International Financial Reporting Standards.

CIPFA and the Local Authority (Scotland) Accounts Advisory Committee have begun a postimplementation review to see what lessons can be learnt from the process and how the Code of Practice on Local Authority Accounting can be improved in the future.

But by the end of this year, it won't just be accounting that has changed. Internal auditing now faces its own transformation - although this is likely to be a much bigger revolution for local government than for central government and the NHS.

CIPFA and the Institute of Internal Auditors announced a year ago that they were going to work together to develop the internal auditing profession in the public sector. This includes drawing up pan-public sector standards, based on the mandatory element of the global IIA's International Professional Performance Framework. This 'element' is wider than just the standards themselves and comprises: a definition of internal auditing, a code of ethics and the standards.

Some of you might already know the IPPF because you are IIA members. Others might work in central government or the NHS, which have been using amended versions of the framework for the past couple of years, respectively the Government Internal Audit Standards and the NHS Internal Audit Standards. The way these two sets of public sector standards have adapted the IPPF have worked well: they reproduce it wholesale and without amendment, but add any supplementary sectoral requirements in boxes within those standards.

At an early stage in the process, the various relevant internal audit standardsetting bodies were approached for their views on developing UK public sector-wide standards. The first response was positive and after initial meetings in autumn 2011, those bodies agreed to develop and manage the new UK Public Sector Internal Audit Standards (PSIAS). In March 2012, the Internal Audit Standards Advisory Board was formed to provide oversight and challenge to the process, taking the Financial Reporting Advisory Board as its model.

Members of the board, which is chaired by Janet Eilbeck, represent the relevant internal audit standardsetters plus practitioner members from central and local governments, the NHS and the private sector. …

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