There are positive signs the sovereign debt crisis is easing. The Greek and Portuguese governments have re-entered the bond markets and
Therefore, it is timely to reflect on what has been done since the bailout programs were introduced and since lenders to the Greek government wrote off significant losses on their debt holdings. Austerity measures have been implemented and government cash reserves built up, but much still needs to be done to raise the general standard of government reporting, transparency, and accountability.
We must not forget too quickly the lessons of poor government reporting--that in some cases was misleading.
At the heart of the issue remains a concern: private sector companies raising funds from investors on the capital markets are required to provide audited, accrual-based, financial statements, yet too many governments--even ones with bonds on the capital markets--don't follow the same practices. In fact, many do not even use accrual accounting.
It has now been over a year since the G-20 Finance Ministers and Central Banks Governors' Meeting in
An integral part of promoting such transparency and comparability is accrual-based financial reporting in accordance with high-quality, globally-accepted standards, such as the International Public Sector Accounting Standards (IPSASs).
As one response to the G-20, the
"IFAC is encouraged by several initiatives that are currently underway; in particular, strengthening the current governance arrangements of the IPSASB will further enhance the credibility of IPSASs and their influence on public sector financial reporting," said
IFAC strongly recommends that, throughout 2014 and into the coming years, the G-20--in particular, finance ministers and central bank governors--continue to focus on this critical matter. To promote greater adoption of IPSASs, IFAC believes that these standards should be added to the Financial Stability Board's list of standards that are designated as deserving of priority implementation.
Furthermore, as part of its key strategic focus IFAC will continue to promote the need for enhanced public sector reporting and financial management through its recently launched Accountability Now! initiative, which aims to promote awareness of the issue, facilitate guidance on implementation of IPSASs, and encourage the development of needed technical capacity.
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