IFAC supports key positions in IMF's paper on fiscal transparency, accountability and risk

28 November 2012

IFAC welcomed the recent release of the IMF's paper, 'Fiscal Transparency, Accountability and Risk'. The paper highlights the seriousness and extent of the current inadequacies in governments' fiscal reporting and accountability, and underscores the immense risks associated with the shortcomings.

“The current sovereign debt crises have starkly revealed the deficiencies in many governments’ reporting practices and consequently their understanding of their actual fiscal positions”, said Ian Ball, IFAC CEO. “IFAC believes that governments around the world must implement necessary institutional reforms to strengthen governmental financial management, and thereby protect the public, as well as investors in government bonds. This will better allow governments to anticipate and manage fiscal shocks, and also help reduce the risk of future debt crises. IFAC applauds the IMF’s work in this area to support the aim, which we share, of strengthening public sector financial reporting and financial management.”

IFAC supports the key positions presented in this paper. Specifically, IFAC recognises the importance of:

• Updating fiscal transparency standards to address gaps in, and inconsistencies between, individual jurisdictions’ standards;
• Complying with international standards for public sector financial reporting, including reporting all assets and liabilities by, for example, using IPSASs;
• Including all entities that have fiscal implications for governments (including central banks, public entities and corporations outside the general governments) in fiscal forecasting, budgeting and financial reporting;
• Evaluating countries’ compliance with fiscal transparency standards using, for instance, auditing and assurance as a means for assessing compliance with standards;
• Strengthening incentives for improvements in fiscal transparency practices;
• Strengthening the institutional relationships among international standard-setters;
• Aligning the methodologies and standards for fiscal forecasting, budgeting and financial reporting to reinforce the links between fiscal transparency and long-term sustainability;
• Building the capacity of professional accountancy organisations, and promoting the role they play in improving government financial reporting practices; and
• Strengthening fiscal transparency and public sector financial management in all nations and, in particular, in developing and emerging nations.

Press release

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