IFAC Welcomes Review Group Report to Enhance Governance Arrangements for Public Sector Accounting Standards

The International Federation of Accountants^® (IFAC^®) welcomes the release today of the International Public Sector Accounting Standards Board^® (IPSASB^®) Governance Review Group^[1] report on the future governance of the IPSASB, which is an important milestone in further strengthening its governance and credibility.

“We fully support the recommendations of the Review Group, and believe they will strongly enhance the robustness of the standard-setting arrangements and ultimately improve the legitimacy and acceptance of the International Public Sector Accounting Standards (IPSASs) across the globe” said Fayez Choudhury, Chief Executive Officer of IFAC. “High-quality internationally accepted standards provide the necessary foundation for high-quality financial reporting in the public sector—an area that needs vast improvement in many jurisdictions around the world, and which leads to better government decision-making, transparency, and accountability.”

Following a public consultation early last year, the Review Group made several important recommendations, including that:

• a governance body, the Public Interest Committee, be established to ensure that the public interest is served by the standard-setting activities of the IPSASB; the Committee’s membership should include, but not be limited to, individuals from the IMF, OECD, World Bank Group, and INTOSAI;
• the Committee’s objectives should be to review and advise IFAC and the IPSASB on the (i) terms of reference of the IPSASB; (ii) arrangements for nomination and appointment of IPSAB members; and (iii) procedures and processes for formulation of the IPSASB’s strategy and work plan and development of IPSASs to ensure that the views of all relevant stakeholders are sought and given due consideration;
• the Committee should not have a direct role in the development, adoption, and implementation of public sector accounting standards;
• IFAC should establish a Consultative Advisory Group (CAG) for the IPSASB; and
• a public consultation on the effectiveness of the IPSASB’s reformed governance arrangements be undertaken no later than 2020.

“The recommendations represent strong support for robust and balanced standard-setting arrangements, whereby the involvement of the profession, public sector, and international organizations ensure that the standards that are produced are in the public  interest and are high quality—and can be practically implemented.” Mr. Choudhury added, “IFAC is highly appreciative of the work done by the Review Group and its members and looks forward to working with these organizations to put the new arrangements in place in 2016.”