Challenges and Opportunities for Public Sector Accounting
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Presentation by Ahmadi Hadibroto,at an Asian Development Bank Regional Workshop on Public Sector Accounting, in Jakarta, Indonesia, September 30, 2014
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Challenges and Opportunities for Public Sector Accounting
- 1. Challenges and Opportunities for Public Sector Accounting Ahmadi Hadibroto International Federation of Accountants September 30, 2014 Asian Development Bank Regional Workshop on Public Sector Accounting Jakarta, Indonesia Page 1 | Confidential and Proprietary Information
- 2. Page 2 | Confidential and Proprietary Information IFAC Operating Lines • Improving quality and capacity • Supporting standards development • Supporting the profession • Global representation and advocacy
- 3. Page 3 | Confidential and Proprietary Information IFAC Key Themes • Government transparency and accountability • Enhanced organizational reporting • Credibility and usability of financial reporting • Accountants in society
- 4. Page 4 | Confidential and Proprietary Information Challenges to Implementation • Staffing shortages • Lack of political support • Absence of public sector financial management infrastructure
- 5. Page 5 | Confidential and Proprietary Information Challenges to Implementation • Training requirements • Accessibility of standards • Translations into local languages
- 6. • Availability of certified technicians and accountants • Establishment of a professional accountancy organization • Support of stakeholders Page 6 | Confidential and Proprietary Information Supporting Implementation
- 7. Page 7 | Confidential and Proprietary Information Certified Professionals: Key Attributes Accountancy education Competence and expertise Trust, ethics, credibility A strong profession Economic growth and stability
- 8. Page 8 | Confidential and Proprietary Information A Role for PAOs • Operate in the public interest • Develop and produce capable and competent accountancy professionals • Promote strong professional and ethical standards • Further the quality of financial reporting • Act as a resource to government
- 9. Page 9 | Confidential and Proprietary Information Ongoing Adoption and Other Initiatives • Many governments, jurisdictions, and international institutions have already adopted IPSASs – Brazil – South Africa • Many more are on the road to implementing the standards
- 10. Page 10 | Confidential and Proprietary Information Ongoing Adoption and Other Initiatives • Accountability Now! • CReCER (Latin America) • Financial Reporting for Economic Development
- 11. Page 11 | Confidential and Proprietary Information Accountants in Society
- 12. Will you join the global accountancy community in Rome in November 2014? www.wcoa2014rome.com www.ifac.org
Editor's Notes
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- Whether in the public or private sector, these attributes serve as cornerstones of our profession and we must redouble our efforts to develop them. Education—including initial learning, practical experience, and continuing professional development—is key to developing expertise and competence at every level. And when we speak of developing the profession, we must recognize that capable accounting technicians serve as the building blocks of an accounting department, often continuing their training and education with a goal of professional advancement. Whether in the public or private sector, some transactions and tasks don’t require the same level of education/certification as a CPA or Chartered Accountant. Trained and certified technicians can process receivables, payables, and other day-to-day transactions. Often, education for public sector technicians and accountants is overlooked or minimal. A study I recently read, “Public Sector Accounting Education: A Neglected Element of Public Financial Management Reforms in Ghana,” found that found that “most accounting faculty members have little or no interest in teaching public sector accounting due to lack of academic interest or unavailability of teaching resources or a combination of both. “ Expertise and competence —supported by appropriate ethical behavior — are necessary to developing trust and credibility. Public sector accountants need training and professional development carried out in compliance with International Education Standards. They also need real-life experience, which is crucial for enhancing professional judgment and skepticism and making professional accountants trusted and credible partners And trust and credibility don’t only enable us to do our jobs as professional accountants. They enable us to be listened to when we speak out on topical societal issues such as the need for improved public sector financial management. We must continue to speak out because even global organizations are not convinced about the role and importance of accounting as a foundation to improving public sector financial management.
- When PAOS maintain the appropriate capacity, they are able to: Operate more effectively to serve the public interest; Develop capable and competent accountants who are subject to professional and ethical standards; Their work furthers the quality of financial reporting and auditing through education and training, quality review, investigation and discipline of professionals; and And importantly, PAOs Act as a resources to government, regulators, and other stakeholders on issues related to accountancy. In short, they are centers of excellence contributing to the development of a strong accounting sector. Generally, most PAOs focus on accountants in the private sector and that is something that must change and evolve. For example, we have to encourage governments to acknowledge the role of PAOs have in establishing public sector certification programs and to listen to the unique issues encountered in carrying out public sector audits. We must also have a plan to develop leadership qualities and soft skills—the character traits and interpersonal abilities that characterize a person’s relationships with other people—for the public sector environment.
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- I have been proud to work with IFAC President Warren Allen and CEO Fayez Choudhury, whose highest priority has been to support the development of high-quality international standards, not just in public sector accounting, but in education, ethics, and auditing and assurance as well. The accountancy profession must also embrace all sectors to support competitiveness and financial stability. IFAC support auditors of listed companies through the IAASB, and public sector accountants through the IPSASB. IFAC will endeavor to increase the confidence in international standards, and advocate for their adoption and implementation. Standard-setting is an ongoing process, and IFAC will collaborate with its stakeholders in a strong and robust process that ensures standards are relevant and updated. We will also work to ensure these standards are accessible, understandable, clear, and capable of consistent application. The accountancy profession serves as the foundation of high-quality financial information, which underpins the effective functioning of capital markets. This is why we must continue to establish and strengthen measures that ensure accountability and transparency and to develop and adopt the most appropriate and effective professional standards. Thank you for the opportunity to speak with you today and thank you for your continued support of IFAC and the independent standard-setting boards.