The Code of Practice on Local Authority Accounting for the UK is based on International Financial Reporting Standards. The governance framework formalises a common accounting standard setting hierarchy across most of the UK public sector. At the top of the hierarchy is EU-adopted IFRS issued by the International Accounting Standards Board (IASB); next are International Public Sector Accounting Standards (IPSAS) issued by the International Public Sector Accounting Standard Board (IPSASB), followed by UK standards issued by the Financial Reporting Council (FRC).
The Code is reviewed continually and is normally updated annually. An outline of the CIPFA/LASAAC annual Code-setting process is as follows:
Stage 1
Each spring, the CIPFA/LASAAC Local Authority Code Board considers items for development of the code, ie a year ahead of the year any changes would be applied.
Stage 2
CIPFA/LASAAC prepares a draft Invitation to Comment (ITC) and a draft Exposure Draft Code, which is formally considered and commented on by the Financial Reporting Advisory Board (FRAB), before being finalised by the CIPFA/LASAAC Board.
Stage 3
CIPFA/LASAAC issues the invitation to comment (ITC) and Exposure Draft Code as consultation documents to local authorities and other interested organisations, for a minimum eight-week consultation period. Following the closure of the consultation period, the board analyses responses and agrees the amendments to be made to the consultation exposure draft code.
The Code CIPFA/LASAAC proposes to publish is considered by CIPFA’s Standards and Financial Reporting Board, the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) and FRAB. CIPFA/LASAAC considers these comments and finalises the Code for publication.
Stage 4
The board publishes the final version of the code for use by local authorities.