International Public Sector Accounting Standards
Points, Ronald J., Bradbury, Simon, The Journal of Government Financial Management
The International Federation of Accountants, or IFAC, is an organization of national professional accountancy organizations that represents accountants employed in public practice, business and industry, the public sector and education, as well as some specialized groups that interface frequently with the profession. It has 153 member bodies in 113 countries, representing more than 2 million accountants. U.S. organizations that are members of IFAC are the American Institute of Certified Public Accountants, the Institute of Management Accountants and the National Association of State Boards of Accountancy.
IFAC strives to develop the profession and harmonize its standards worldwide to enable accountants to provide services of consistently high quality in the public interest. Through its seven standing committees, IFAC works with member bodies to achieve this objective by:
Serving as international advocates. IFAC develops and promotes high quality technical, professional and ethical publications and guidance for accountants employed in every sector.
Acting as agents for change. IFAC provides leadership on emerging issues, the impetus for the liberalization of accountancy services, and a universal voice for the world's accountants on issues of public and professional concern. Much of this is accomplished through outreach to numerous organizations that rely on or have an interest in the activities of the international accountancy profession.
Facilitating the development of a harmonized worldwide accountancy profession. IFAC fosters the advancement of strong national professional accountancy organizations. It works closely with regional accountancy organizations and development agencies to accomplish this.
The importance of IFAC's role has become more apparent in recent years as international financial crises have highlighted the need for better governance through, for example, more transparent financial reporting and more effective auditing. Through its worldwide membership, IFAC is uniquely placed to work with other key institutions to strengthen the global financial architecture, specifically in relation to accounting and auditing.
The IFAC Public Sector Committee
The Public Sector Committee (PSC) was established in 1986 to address, on a coordinated worldwide basis, the needs of those involved in public sector financial management, reporting, accounting and auditing.
The underlying philosophy of the PSC is that while most of the basic principles of accounting and auditing are the same across both public and private sectors, the application of these principles raises a number of specific issues in the public sector context. The PSC has a role in identifying and addressing specific public sector accounting and auditing issues and concerns. The PSC also addresses differences in practice and application that may arise between public sectors in different jurisdictions and between levels of the public sector within a jurisdiction.
The IFAC Board has given the PSC authority to issue standards, guidelines, studies and occasional papers on financial reporting, accounting and auditing in the public sector.
PSC members are selected by the IFAC Nominating Committee and approved by the Board. Members are appointed for a three-year term, with the option of one renewal. Countries are appointed for an initial term of two-and-a-half years, which may be renewed.
In addition to the members and technical advisers, meetings are attended by observers from the Asian Development Bank, the International Organization of Supreme Audit Institutions (INTOSAI), the International Accounting Standards Committee (IASC), the International Monetary Fund (IMP), the Organisation for Economic Co-operation and Development, the United Nations Development Programme and the World Bank.
Prior to beginning its Accounting Standards Program in 1996, the PSC had issued the following publications:
Financial Reporting by Government Business Enterprises (1989) Applicability ofInternational Standards on Auditing to Audits of Financial Statements of Government Business Enterprises (1990)
Financial Reporting by National Governments (1991)
Elements of the Financial Statements of National Governments (1993)
Auditing for Compliance with Authorities-a Public Sector Perspective (1994)
Using the Work of Other Auditors
Public Sector Perspective (1994)
Definition and Recognition of Assets (1995)
Accounting for and Reporting Liabilities (1995)
Performance Reporting by Government Business Enterprises (1996)
The Government Financial Reporting Entity (1996)
Definition and Recognition of Revenues (1996)
Definition and Recognition of Expenses/ Expenditures (1996)
Selected Bibliography of Public Sector Accounting and Auditing Material (1993)
In 1996-1997 the PSC raised about $1 million from a consortium of international lending agencies to begin an accounting standards project. …