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IFAC CEO Fayez Choudhury said the two actions “provided an important impetus for transparent, comprehensive, reliable, and comparable public sector financial reporting".
The G20 recap and communiqué state that “(i)n pursuit of our goal of strengthening the public sector balance sheet, work is needed to better assess risks to public debt sustainability. This includes, inter alia, taking into account country-specific circumstances, looking at transparency and comparability of public sector reporting, and monitoring the impact of financial sector vulnerabilities on public debt.” It calls on the IMF and World Bank to explore the issue further and provide updates. Prior to the G20 meeting, outgoing IFAC CEO Ian Ball addressed “The G-20 Agenda under the Russian Chairmanship”, organised by the Institute of International Finance and the Russian Federation Ministry of Finance, where he called on Russia to use its G20 Presidency to strengthen global financial stability by supporting adoption and implementation of IPSASs.
The EC report states that “the sovereign debt crisis has underlined the need for governments to clearly demonstrate their financial stability and for more rigorous and more transparent reporting of fiscal data". It underscores the need for international comparability, as well as governments’ public interest obligation to owners of government debt securities, potential investors, citizens, and other stakeholders, to provide timely, reliable and comparable information on their financial performance and position, in the same way that listed companies have obligations to equity market participants.
In addition, it recognises IPSASs as the only internationally-recognised set of public sector accounting standards, and their foundation in the International Financial Reporting Standards, which are widely applied by the private sector.
“While there has been some progress on reforming public sector financial management and adopting accrual accounting and IPSASs, we need to quicken the pace of change”, Choudhury said. “IFAC’s efforts are strengthened when global organisations like the G20, EC, IMF and World Bank show leadership in this area.”