Accounting Standards - IFAC 'ignored concerns'
The International Federation of Accountants was accused this week of ignoring criticism of the five controversial edicts it has outlined to enhance accountability and financial management of governments worldwide.
The English ICA refused to comment until December, but other experts said IFAC appeared to have turned a deaf ear to representations.
Issued as exposure drafts for consultation, the pronouncements form the first international public-sector accounting standards, and set out to establish common reporting requirements for the four accounting bases adopted by governments – cash, modified cash, modified accrual and accrual. These were outlined in the committee’s proposal ‘Guideline for Governmental Financial Reporting’.
Topics detailed in the drafts include: the presentation of financial statements; cash-flow statements; net surplus or deficit for the period, fundamental errors and changes in accounting policies; the effects of changes in foreign exchange rates; and borrowing costs.
UK accountants told IFAC to take another look at the guideline earlier this year (Accountancy Age, 13 August, page 5). The institute’s financial reporting committee questioned IFAC’s presentation of the four accounting models and said cash and accruals were the two main alternatives, with a spread of different hybrid approaches.
An institute spokesman said it would be ‘premature’ to comment until it had looked at the drafts in more detail.
But Andy Simmonds, a principal at Deloitte & Touche, said: ‘The fact that IFAC has gone ahead and issued five drafts would suggest it has not really gone through the feedback it had from the Guideline for Governmental Financial Reporting in July.’