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The study, which examined accounting and budgeting practices at the national government level in OECD countries, discusses the challenges and benefits of accruals reforms and considers what steps countries are taking to make better use of accrual information in the future.
“High-quality financial reporting is essential to ensure that governments make fiscal decisions based on up-to-date information and an accurate understanding of their financial position,” said Fayez Choudhury, IFAC CEO. “They provide a mechanism through which legislatures, auditors, and the public at large can hold governments accountable for their financial performance.”
The study showed that most OECD countries have reformed and modernized their financial reporting practices over the last few decades:
The study also points out that while the direct adoption of international accounting standards, such as IPSAS or IFRS, by national governments remains very low, many standard setters use IPSAS or IFRS as primary or explicit references for developing their national standards.
“While governments still seek to improve the usefulness and comprehensibility of their financial reports, a majority of OECD countries expressed satisfaction that accounting reforms have already resulted in greater transparency and accountability of their financial operations,” said Jón R. Blöndal, Head of the OECD Budgeting and Public Expenditures Division.