The Chartered Institute of Public Finance and Accountancy (CIPFA) has welcomed the publication of a report by Eurostat, the European Commission’s statistics directorate, into the suitability of International Public Sector Accounting Standards (IPSASs) for adoption in Europe.
The report’s support for the adoption of accrual reporting is consistent with the recent recognition by the G20 of the importance of transparency and comparability of public sector reporting. While the report acknowledges that the status of IPSASs as ‘the only internationally recognised set of public-sector accounting standards’, it concludes that more detailed and prescriptive guidance – European Public Sector Accounting Standards (EPSASs) – would be necessary in order to ensure consistency of application.
The report acknowledges the need for political support for moving forward, but leaves open for further discussion key questions about EPSASs' development, and implementation approach and timing.
Ian Carruthers, CIPFA’s Policy and Technical Director, commented,
“The global financial and sovereign debt crises have highlighted the damaging consequences of weak public financial management (PFM) around the world and the need for urgent and co-ordinated action to resolve the problem. The consistent adoption of accrual reporting in central, state and local governments across Europe as recommended by Eurostat would be a major step towards strengthening PFM in the region, as well as providing an important lead for other parts of the world.
We welcome Eurostat’s recognition that IPSAS represent an “indisputable"reference point for the development of harmonised accounting standards in Europe. However, the extent to which future public finance information is comparable globally will depend on how closely Eurostat follows IPSASs in its implementation requirements.”
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