The four key recommendations in the letter are in line with IFAC’s mission to contribute to the development, adoption and implementation of high-quality international standards; and by doing so, contribute to the development of strong international economies.
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IFAC recommends that the G20 facilitate urgent and fundamental work, to be conducted or commissioned by the Financial Stability Board (FSB), to consider the nature of institutional changes that are needed in public sector financial management to protect the public and investors in government bonds.
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IFAC encourages the G20 to make explicit that the FSB’s role encompasses public sector arrangements, as part of its aim "to coordinate at the international level the work of national financial authorities and international standard-setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies". In acknowledging the importance of the public sector as part of the FSB’s role, IFAC encourages the establishment of a working group within the FSB architecture, which is specifically tasked with examining enhanced public sector financial reporting, transparency and accountability.
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IFAC recommends that the G20 actively encourage and facilitate the adoption of accrual-based accounting by governments and public sector institutions, which promotes greater transparency and accountability in public sector finances, and allows for monitoring of government debt and liabilities for their true economic implications.
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IFAC recommends that the G20 encourage the FSB to include IPSASs as a set of standards key for sound financial systems and deserving of timely implementation.
“For the last 10 years, IFAC has consistently promoted the need for better financial reporting and financial management in the public sector. The sovereign debt crisis has given rise to a very significant number of policy developments at an international level, but this issue has yet to be adequately addressed. The use of IPSASs by governments worldwide will improve the quality of financial information reported by public entities, which is critical for investors, taxpayers, and the general public”, said IFAC Chief Executive Officer, Ian Ball.
Press release
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