The document discusses the importance of a robust public accounting system for governments, emphasizing that citizens are the true shareholders of public funds. It identifies shortcomings in current government accounting practices and the need for governments to enhance transparency and accountability in financial reporting. The paper advocates for the adoption of International Public Sector Accounting Standards (IPSAS) as a means to improve public financial management and decision-making.

1. www.pwc.com
Global and Swedish
Experience – Financial
Crisis, Public Accounting
IFAC
Conference and Leadership
Vienna
March 19-
20, 2012
Jan Sturesson
Global Leader
Government and Public Services

2. If you control OIL, you control whole NATION
If you control FOOD, you control PEOPLE
If you control MONEY, you control entire WORLD.
– Henry Kissinger
But, if we do not have a solid and robust
internationally accepted public accounting system –
we have NO CONTROL over the public money...
19 March 2012
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3. What is the largest “company” in your country?
A bank ? A utility
company ?
A telecom A retail
company ? company ?
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4. Introduction
NO A bank? A utility
company?
A telecom A retail
company? company?
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5. Introduction
It is the central government,
states or regions, or big
cities...
... and citizens are
the shareholders...
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6. Understanding the Business Logic in Private and
Public sector
Public Sector Private Sector
Business
Verksamhet Money
Pengar
Goal (Vinstin service
Profit i Profit in $, £
& benefits
service/nytta) Det or €.. i kr)
(Vinst
Government
kommunala
owned
Companies
företaget
Means Money Business
Pengar
Budget, taxes Verksamhet
Services &
(Skatter,
& fee products
6

7. Private sector and public sector “similarities”
Private Public
Company Government
Owners Shareholders Citizens/tax payers
Governing body Board of directors Politicians & civil servants
Stakeholders Investors in shares and Investors, banks, citizens,
bonds, banks, employees, customers, suppliers
customers, suppliers
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8. A two-speed financial reporting landscape
Private Public
High-quality accrual accounts Accounts often based on cash
(IFRS) movements
Global harmonisation in progress Accounting practices largely diverse
Strong regulatory environment National regulations
(+ statistical reporting)
Management using IFRS Lack of insight and week link
financial data for decision- between budget, accounts and
making decision making
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9. Shortcomings in governments’ accounting
Currently no comprehensive picture of the financial wealth of a State
Hidden liabilities, full long-term impact of decisions not reflected in the
accounts
Financial
guarantees
Fixed assets Pensions
Consolidation
scope and
Financing arrangements reporting entity
(PPP, etc.)
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10. What do we want ?
January 2012  2/3 of CEO’s
concerned about governments’
responses to fiscal deficits and
debts burdens
“Governments need to step up and
provide information which delivers
real insight into public financial
management and decision-making”
“Good public accounting systems
send out signals so actions can be
taken, bad accounting systems
hide the problems and we consume
our children's future and face new a
new crisis”
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11. Moving towards financial reporting maturity
IPSAS is a catalyst to
providing high-quality
transparent financial
information, enhancing good
governance, public
accountability and
improving operational
Integrated
performance reporting, perf
Internationally ormance
harmonised and management
recognised and insight on
Accrual long-term fiscal
accounting financial reporting
(IPSAS) sustainability of
public finances
 Tool for
Cash decision
accounting making
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12. IPSAS as part of wider financial reform
Based on our more than 10 years
experience in IPSAS conversions with
governments and most of the large
international organisations, key success
factors for implementation are:
• Leadership who understand the role of
accounting and the big picture
• Political buy-in and support
• Proven conversion methodology
• Experienced team and advisors
• Lessons learnt and best practice
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13. Do not miss a good crisis...
The sovereign debt crisis provides a unique IPSAS
opportunity to make things happen:
• true and fair view – public sector economy
• transparency and accountability 2.0
• consolidation with companies on all levels and
then“whole of government accounts”
• integrated holistic reporting
The NEXT GENERATION will require and demand
that we get this right!!
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14. www.pwc.com
The Experience in
Sweden – Financial Crisis,
Public Accounting and
IFAC
Conference Leadership
Vienna
March 19-
20, 2012 Göran Persson, Former Prim Minister,
Sweden
Bo Lundgren, Former Minister of Fiscal and
Financial Affairs, Sweden