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Jan Sturesson, PwC - IFAC Sovereign Debt Seminar Presentation


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Jan Sturesson, Leader, Global Government and Public Services, PwC - IFAC Sovereign Debt Seminar - The Experience in Sweden

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Jan Sturesson, PwC - IFAC Sovereign Debt Seminar Presentation

  1. 1. Global and Swedish Experience – Financial Crisis, Public AccountingIFACConference and LeadershipViennaMarch 19-20, 2012 Jan Sturesson Global Leader Government and Public Services
  2. 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 2012PwC 2
  3. 3. What is the largest “company” in your country? A bank ? A utility company ? A telecom A retail company ? company ? 19 March 2012PwC 3
  4. 4. IntroductionNO A bank? A utility company? A telecom A retail company? company? 19 March 2012PwC 4
  5. 5. IntroductionIt is the central government,states or regions, or bigcities... ... and citizens are the shareholders... 19 March 2012PwC 5
  6. 6. Understanding the Business Logic in Private andPublic 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. 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 19 March 2012PwC 7
  8. 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 19 March 2012PwC 8
  9. 9. Shortcomings in governments’ accountingCurrently no comprehensive picture of the financial wealth of a StateHidden liabilities, full long-term impact of decisions not reflected in theaccounts Financial guarantees Fixed assets Pensions Consolidation scope and Financing arrangements reporting entity (PPP, etc.) 19 March 2012PwC 9
  10. 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 childrens future and face new a new crisis” 19 March 2012PwC 10
  11. 11. Moving towards financial reporting maturity IPSAS is a catalyst to providing high-quality transparent financialinformation, 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 19 March 2012 PwC 11
  12. 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 19 March 2012PwC 12
  13. 13. Do not miss a good crisis...The sovereign debt crisis provides a unique IPSASopportunity to make things happen:• true and fair view – public sector economy• transparency and accountability 2.0• consolidation with companies on all levels andthen“whole of government accounts”• integrated holistic reportingThe NEXT GENERATION will require and demandthat we get this right!! 19 March 2012PwC 13
  14. 14. The Experience in Sweden – Financial Crisis, Public Accounting andIFACConference LeadershipViennaMarch 19-20, 2012 Göran Persson, Former Prim Minister, Sweden Bo Lundgren, Former Minister of Fiscal and Financial Affairs, Sweden