Public financial management (PFM) reforms will only be achieved through finance professionals with the right skills and knowledge.

Governments are implementing PFM reforms in a bid to improve the accountability, transparency, governance and integrity of revenues and spending. But many reforms have addressed structures, systems and processes rather than people and capabilities, according to ACCA (the Association of Chartered Certified Accountants) and the International Federation of Accountants (IFAC).

A new joint ACCA/IFAC report – released at the World Congress of Accountants (WCOA) held in Mumbai India 18-21 November – aims to boost PFM reforms across the globe.

A Global Guide for Professionalisation in Public Sector Finance outlines what professionalisation means in public sector finance, sets out the benefits of professionalisation, and offers a high-level roadmap to support global good practice in professionalisation.

Discussing the global guide ahead of a panel discussion at WCOA, Joseph Owolabi, ACCA President, said: ‘Professionalisation brings credibility, trust and confidence in public finances by supplementing the systems and public finance processes with the right skills for accountability, transparency, good governance and external scrutiny. A professionalised workforce within a finance function supplies more than accounting information. They bring wide value to public sector finances – providing improved revenue collection, effective budgetary controls, and the data required to support policy decision making.’

Kevin Dancey, IFAC CEO, said: ‘We are looking to rebalance the focus so that it is not only on the process but also on the people. The value of the accountancy profession, whether in the public or private sectors, comes from the experience, skills, judgement and ethical behaviour of its people.  By increasing the number of professional accountants working in the public sector, we will no doubt add to the credibility and effectiveness of PFM, and reinforce trust in public services and spending.'

Achieving professionalisation brings multiple benefits to the economy, governments and individuals. A key benefit for economies is greater financial credibility; for governments improved financial management discipline; and for individuals gaining access to diverse career options.

The report acknowledges that achieving professionalisation is not straightforward or easy. It requires political will, structures, adoption and implementation of complex policies plus continuous development and improvement.

The report has case studies of good practice from Tanzania, the UK, Cyprus, the Philippines Pakistan, Malaysia and Wales.

Alex Metcalfe, ACCA’s Head of public sector, said: ‘Political leadership and commitment for professionalisation is the most important factor for sustaining PFM reforms over time. In some countries, there is a lack of recognition that change is needed at all. In other countries, PFM reforms have concentrated on moving from cash-based to accrual-based accounting. But now more effort is urgently required to professionalise public finance staff and provide opportunities for training for professional qualifications.’

Access the global guide.

About IFAC

IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associations in 135 jurisdictions, representing more than 3 million accountants, in public practice, education, government service, industry and commerce.

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants.

We’re a thriving global community of 241,000 members and 542,000 future members based in 178 countries and regions, who work across a wide range of sectors and industries. We uphold the highest professional and ethical values.

We offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. Our qualifications and learning opportunities develop strategic business leaders, forward-thinking professionals with the financial, business and digital expertise essential for the creation of sustainable organisations and flourishing societies.

Since 1904, being a force for public good has been embedded in our purpose. In December 2020, we made commitments to the UN Sustainable Development Goals which we are measuring and will report on in our annual integrated report.

We believe that accountancy is a cornerstone profession of society and is vital helping economies, organisations and individuals to grow and prosper. It does this by creating robust trusted financial and business management, combating corruption, ensuring organisations are managed ethically, driving sustainability, and providing rewarding career opportunities.

And through our cutting-edge research, we lead the profession by answering today’s questions and preparing for the future. We’re a not-for-profit organisation. Find out more at accaglobal.com

Volunteers are sought to serve as members on the International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting body that serves the public interest by setting high-quality accounting standards for use by public sector entities around the world in the preparation of general purpose financial reports.

Volunteers’ initial three-year term of service will commence January 1, 2024. Candidates will ideally have a public sector background and/or experience in standard setting to be able to contribute value to the work of the Board. English proficiency (both written and oral) is essential, as this is the language in which the IPSASB operates, although nominations from jurisdictions where English is not the main language, are encouraged.

Nominations of qualified candidates from all regions of the world are encouraged, with a particular emphasis on Francophone Africa, Latin America, and the Caribbean. Nominations from a wide range of relevant backgrounds are sought, including, but not limited to, candidates from:

• Users of general purpose financial reports, such as parliamentarians, budget offices, and credit-rating agencies;
• Ministries of Finance, Treasury Departments, and other such preparers of accrual-based financial statements, including those reporting directly or indirectly in accordance with IPSAS or in the process of transitioning to IPSAS; and
• Public sector external auditors.

“In order to develop high-quality international standards and effectively promote IPSAS adoption, IPSASB volunteers need diverse backgrounds and skillsets,” said Ian Carruthers, IPSASB Chair. “With the continuing global transition to accrual IPSAS, I strongly encourage individuals that are using IPSAS, or actively transitioning to IPSAS, to apply and nominate candidates. In addition to the global impact volunteers can make, Board participation is also a valuable experience that benefits the volunteer and its nominating or employing organization.”

All stakeholders, including the general public, as well as International Federation of Accountants (IFAC) member organizations, the Forum of Firms, governments, and other organizations are invited to nominate candidates. 

The deadline for submitting applications is January 31, 2023. Please see the Call for Nominations for more details and information on how to submit an application.

About the IPSASB

The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

About the Nominating Committee

The Nominating Committee is responsible for the selection process for IPSASB membership, including leadership roles. The Public Interest Committee oversees the nominations process for IPSASB and provides its advice. The International Federation of Accountants® (IFAC®) Board approves the IPSASB composition. To learn more about the Nominating Committee, please visit IFAC website. 

About the Public Interest Committee

The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.

As a global systemic risk, climate change has become a focal point for corporate sustainability disclosure. Getting to Net Zero: A Global Review of Corporate Disclosures analyzes disclosure trends in emissions reduction targets and transition plans of the 40 largest exchange-listed companies in 15 jurisdictions, for a total of 600 companies. The jurisdictions include G7 countries and 8 non-G7 countries for the 2020 reporting year.

Key policy considerations include:

With the emergence of widespread economic and political uncertainty in 2022 in the wake of the COVID-19 pandemic, IFAC highlights the interconnection between global cooperation, the sustainability agenda, the need for strong public financial management (PFM) and the fight against corruption. IFAC’s 2022 G20 Call to Action builds off the four priorities from IFAC’s 2020 G20 Call to Action and the two key actions set out in 2021 to emphasize that we cannot make progress on any of these issues in isolation.

“Tremendous interconnectivity is required if we are to make any significant progress toward achieving the UN’s Sustainable Development Goals. This is not just within the accountancy profession, but also between the profession and other UN SDG stakeholders. We commend the efforts of the G20, and also call on G20 leaders to do even more,” said CEO Kevin Dancey.

“At the same time, the accountancy profession will continue to deploy its unique skills and competencies to support strong and sustainable public and private sector organizations, and strong and sustainable financial markets and economies. This is our public interest mandate.”

IFAC’s 2022 Call to Action and its focus on sustainability-related reporting standards, public financial management, and anti-corruption aligns with IFAC’s IMPACT approach. Introduced earlier this year, the IMPACT approach identifies the most important issues currently facing the accountancy profession, private & public organizations, and global financial markets & economies, and provides a framework for the profession to be able to work together to help drive constructive change. The IMPACT approach is a guide for where the accountancy profession should be headed, and a tool for increased collaboration and cohesion within the profession.

To strengthen global economies, societies, and the environment, and to continue to address challenges resulting from the COVID-19 pandemic, IFAC calls on G20 leaders to:

1. Make Sustainability a Reality, Not Just a Goal

• Support the IFRS Sustainability Disclosure Standards
• Implement policies for an inclusive transition
• Balance climate with broader ESG and reporting
• Recognize the role of professional accountants in developing decision-useful sustainability information

2. Support Public Financial Management and Fight Corruption

• Support professionalization in the public sector and adoption of IPSAS
• Implement crucial multilateral commitments against corruption and related issues
• Look to the global accountancy profession as central partners

3. Work Together for Collective Prosperity

• Minimize regulatory fragmentation to drive economic growth
• Understand the importance of global public health and its interplay with PFM
• Resolve global conflicts and focus on long-term issues

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The International Public Sector Accounting Standards Board (IPSASB), developer of IPSAS®, international accrual-based accounting standards for use by governments and other public sector entities around the world, has issued a new Exposure Draft (ED) proposing additional guidance on how two previously published Recommended Practice Guidelines (RPGs) can be applied now by governments and public sector entities to report on sustainability program information. This is ahead of any decision on the potential development of a sustainability reporting framework for the public sector.

Released today for public comment, ED 83, Reporting Sustainability Program Information —RPGs 1 and 3: Additional Non-Authoritative Guidance aims to demonstrate how RPG 1, Reporting on the Long-Term Sustainability of an Entity’s Finances and RPG 3, Reporting Service Performance Information can be immediately applied to report on sustainability program information. Additional Implementation Guidance is proposed, along with Illustrative Examples on such key topics as green bonds, carbon taxes, tax expenditures, and other programs developed to mitigate the effects of climate change and achieve the UN’s Sustainable Development Goals. The proposed guidance is intended to support implementation of the key areas highlighted in the recent OECD paper Green budgeting: A way forward. Like IPSAS, RPGs are intended to enhance the quality and transparency of public sector financial reporting by providing better information for public sector financial management and decision making. The IPSASB encourages public sector entities to follow RPGs when preparing their broader general purpose financial reports. 

Concurrently with the release of this ED, the IPSASB is considering the responses it received to its recent Consultation Paper, Advancing Public Sector Sustainability Reporting. It will decide whether and how to move forward in this area at its December 2022 meeting.

“Strong governance, good strategic and risk management, and accountability for the use of public sector resources are essential if governments are to play their parts in addressing climate change and sustainability more broadly,” said IPSASB Chair Ian Carruthers. “As we explore the potential development of a public sector sustainability framework, we urge governments and jurisdictions in the interim to look to the strong foundations for reporting on programs addressing both climate change and the SDGs that the IPSASB has already provided in its RPGs. This is now more explicitly addressed through the proposed additional guidance in this ED.”

Comments on ED 83 are requested by January 16, 2023, and will be reviewed and discussed by the IPSASB and will help shape the final Implementation Guidance and Illustrative Examples added to the existing RPGs.

Access the ED and its related At-a-Glance summary.

About the IPSASB

The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

About the Public Interest Committee

The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.