ipsas at 20: origins and challenges or a walk down … · · 2017-07-20ipsas at 20: origins and...
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IPSAS at 20: Origins and ChallengesorA Walk Down Memory Lane…
Ian BallChair, Audit Committee for Financial Statements of the NZ GovernmentChair, CIPFA International
Winterthur, 3 July, 2017
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Starting At The Beginning…
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But also…
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Performance, Not Good Accounting• “Owner” vs. “purchaser”
Financial statements report ownership performance
Service performance statements report purchase performance
• Inputs / outputs / outcomes• “Crown” vs. department
Need accrual accounting to measure both
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How The Economist Saw It…
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International Federation of AccountantsPublic Sector Committee
Minutes of MeetingMarch 7-9, 1989 – Melbourne, Australia
IFAC – my first meeting
On March 9, 1989, Ian Ball of New Zealand and some members of the Australian Public Sector Accounting Standards Board observed the round table discussion.
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Evidence and Experience
• Success came early, and continued• Same benefits could “accrue” elsewhere• Demonstration effect – it can be done…• Insurance for the NZ reforms
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Getting IPSAS Off the Ground• PSC membership
– Setting standards– Level of commitment
• Council agreement• Funding• Staffing
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Secondary issues:• IASC copyright permissions• Translations• INTOSAI CAS• Consultative Group
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Invaluable New Zealand Support• The Treasury
– Dr Graham Scott, Secretary to the Treasury• New Zealand Society of Accountants
– April Mackenzie, Director, Accounting and Professional Standards
– Kevin Simpkins, Technical Adviser • Public Sector Performance (NZ) Ltd
– Tony Dale, Principal
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Invaluable IFAC Support
• Council and Board• PSC and IPSASB members
and chairs• Technical Directors and staff
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Original Objectives
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IFAC PSC Strategic Plan – 1996
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Planned and Actual Stages of Development• Projects 1 and 2• Four bases to two• Conceptual framework
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Two decades on - 2016 Accrual Survey
In 15 years, from 24% to 73% of OECD Countries use accrual accounting.
Another 9% are transitioning.
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Source: PWC, Towards a new era in government accounting and reporting, second edition, July 2015.
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Source: PWC, Towards a new era in government accounting and reporting, second edition, July 2015.
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IPSAS – the benchmarkIMF IPSAS are the only international accounting standards designed for the
public sector (2014)
EC IPSAS is currently the only internationally recognized set of public sector accounting standards (2013)
World Bank As the only available international financial reporting standards for governments that are based on generally accepted accounting principles, IPSAS can contribute to greater quality, consistency, and comparability of government financial information within and between jurisdictions. (2004)
FEE International standards (IPSAS) already exist. They are the only recognized set of international standards. (2014)
IFAC High-quality and timely accrual-based financial reporting in the public sector can be achieved through the adoption of globally-accepted, high quality reporting standards developed specifically for the public sector, i.e., IPSASs. (2014)
IIF The IIF supports the implementation of international public sector accounting standards (IPSAS) for governments due to their importance for global growth and stability. (2013)
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So How Is It Going in NZ Then?
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So How Is It Going in NZ Then?
Canterbury Earthquakes
Global Financial Crisis
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And comparatively?
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Four Year Change in Net Worth – NZ and UK
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Context of the PFM World - 2017
• Growth• Debt• Tax
– Cooperation– Competition
• Uncertainty• Globalization
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Context of the PFM World - 2017
• Growth• Debt• Tax
– Competition– Cooperation
• Uncertainty• Globalization
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Context of the PFM World - 2017
• Growth• Debt• Tax
– Competition– Cooperation
• Uncertainty• Globalization
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Context of the PFM World - 2017
• Growth• Debt• Tax
– Cooperation– Competition
• Uncertainty• Globalization
cipfa.org
Context of the PFM World - 2017
• Growth• Debt• Tax
– Cooperation– Competition
• Uncertainty• Globalization
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Context of the PFM World - 2017
• Growth• Debt• Tax
– Cooperation– Competition
• Uncertainty• Globalization
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And Finally – Action on Misreporting
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Current and Future Challenges
• Setting standards – technical program• Convergence – Countries, IFRS and SNA/GFS
– Institutional pressures to diverge
• Usefulness (coming full circle)– Performance management (core to PFM)– Fiscal management
• Establishing a role in fiscal policy• Authority – can IPSAS be mandatory?• Governance – who is independent?
For example, a government’s policies will not be sustainable if they significantly reduce its net worth.
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IPSAS at 20: Origins and ChallengesorA Walk Down Memory Lane…
Ian BallChair, Audit Committee for Financial Statements of the NZ GovernmentChair, CIPFA International
Winterthur, 3 July, 2017