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By Dave Baldam, CIPFA Senior Finance Advisor
The importance of year-end financial reporting should be seen in the context of financial reliance. Many commentators see this as a purely technical exercise aimed at satisfying auditors. However, stop and think for a moment what the reputational risk would be to an organisation of getting this wrong.
Negative press publicity, questions raised about the integrity of underlying financial accounting records, financial administration, financial control, exposure to financial liabilities and protection of the authority’s resources and assets, and the negative impact on staff morale.
2012-13 is the third year of IFRS in local government and, whilst there are few changes to grapple with this year, there are still particular challenges facing authorities. These technically challenging issues include, but are not limited to, recording and accounting for non-current assets in the fixed asset register (including addressing the code requirements for component accounting), identifying and consolidating entities in group accounts and accounting for leases.
With few changes in this year CIPFA considers it a great opportunity for local authorities to take stock and review/ improve their Statement of Accounts. CIPFA has the technical and practical skills/ knowledge and track record to assist local authorities with these improvements.