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ARCHIVED - Evaluation of International Public Sector Accounting Standards Board Contribution Program


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V Conclusions and Recommendations

A. Conclusions

The IPSASB contribution program has made good progress in achieving most of its intended outcomes. The main conclusions of the study are the following:

  • In the past five years IPSASB has completed the development and publication of a full set of 31 accrual basis standards and updated its cash basis standard and guidance documentation.
  • The level of engagement of the global community in improving public sector accounting standards has steadily increased over the past several years as measured by the year-over-year level of participation in the IPSASB standards development process and the significant continuing engagement of such international organizations as the International Monetary Fund, G 20, and World Bank.
  • IPSASB has partially achieved its intermediate outcome of member countries adopting and implementing accounting standards. This is an on-going process. Over eighty countries have engaged in pursuing the implementation of accrual based standards equivalent or similar to those published by IPSASB during the past ten years.
  • The combined financial contributions made by the Government of Canada and the CICA have been a key factor in stabilizing the funding and advancing the work of the IPSASB at a critical time in its evolution.
  • The IPSASB contribution program together with the parallel funding from the CICA have directly influenced the participation of Canadian public sector institutions and stakeholders in the development of high quality public sector accounting standards.
  • Although Canada has been highly influential in the world of public sector accounting standards, the TBS contribution program has not been as publicly recognized. There is little evidence of increased visibility for the Government of Canada.
  • There is a significant net benefit to Canada arising from the IPSASB contribution program, the office relocation to Toronto along with the co-location with the CICA.
  • The terms and conditions of the contribution agreement were appropriate to the risk. Using existing IFAC accountability instruments for reporting provided TBS with an efficient and sufficient means of oversight of the contribution program spending.
  • At the time the IPSASB contribution program was initiated it was fully aligned with the federal government's agenda of the day. While political imperatives such as economic stimulation and deficit reduction now dominate the agenda, accountability remains a cornerstone of the Government of Canada's priorities and is highly relevant.
  • The IPSASB contribution program is complementary to the support provided to IFAC by the CICA, international organizations and, to a lesser extent, world governments. Funding for IPSASB activities from outside sources, although increasing, remains a challenge. The support from the CICA does not duplicate or work at cross purposes with the Government of Canada's funding support.
  • There is a strong rationale for continuing some level of support by the Government of Canada which would complement the CICA funding in support of the investment by IFAC in its Canadian operations.

B. Recommendations

  1. The Government of Canada via TBS should continue financial support to the IPSASB's international public sector accounting standards activities. The rationale for continued support is based on the performance achieved by IPSASB in meeting the objectives set out in the IPSASB Contribution Program and the continued need for financial support from the public sector for this important international and domestic activity. Canada's support to the IPSASB Program should be seen and communicated as a positive model of support for high quality global accounting standards activities.
  2. TBS should continue to collaborate with the Canadian Institute of Chartered Accountants (CICA) and the Public Sector Accounting Board (PSAB) to engage the Canadian public sector accounting community and stakeholders in the development of high quality global accounting standards. The opportunity presented by having the world standards setting body located in Canada should be fully exploited. Cooperative programs, educational opportunities and academic interchanges would benefit the Canadian accounting and auditing communities.
  3. In considering the objectives of a future funding arrangement, the TBS should consider requesting that IPSASB commission an independent study on the constraints and benefits from adoption of IPSASs at the national, state and local government level. While significant progress has been achieved in implementing accrual accounting by international organization, national and state governments have been slower to transition to ( IPSASB inspired) accrual accounting. There is an abundance of views, beliefs and anecdotal evidence on the constraints faced by governments and considerable opinion on the solutions to overcome existing constraints to adoption. A comprehensive study could provide IPSASB and the international public sector community with a roadmap to better understand and overcome the causal factors. A study focussed on constraints to adoption is relevant and timely given the recent global economic crisis and concerns about accountability, transparency and sustainability of public sector finances.
  4. The TBS should encourage the IPSASB to increase public communications and consultation processes in the French language to reflect the bilingual status of Canada nationally as well as international requirements. IPSASB's working language, and that of its parent organization the IFAC, is English. Standards and related information are translated into a number of languages by third parties. Increased use and availability of French language projects and documents would benefit and encourage the participation of Canadian stakeholders.
  5. The TBS should develop a communication strategy in support of Canada's contribution in the development of public sector accounting standards and encourage the IPSASB to proactively communicate the extent and benefits received from the Government of Canada. The current agreement was successful in attracting a world-class international standards setting body to relocate in Canada. The CICA has leveraged this opportunity by working collaboratively with the IPSASB technical team, co-located in Toronto, and increased the participation of the Canadian public sector and stakeholders to engage in setting of international public sector accounting standards.

1 For public sector standards (IPSASs) that are based on private sector standards (IFRSs), the text of the IFRS is retained unless there is a public sector specific reason for a departure, or additional examples are included to illustrate certain requirements in the public sector context.

2 Treasury Board of Canada Secretariat, "Request for Proposal: Evaluation of International Public Sector Accounting Standards Board (IPSASB) contribution program," p. 5.

3 The following is an example of a meeting/presentation by IPSASB member during this period. "Meeting/discussion with Cour des Comptes on the SCA ED, LTFS consultation paper, Conceptual Framework project with France interested parties (e.g., Ministry of Finance, Accounting Standards Board, national and regional courts of accounts, academics, auditors) (Cordier) – 4/1 Paris, France".

4 Mr. Harry Wilkinson is the former Director of Accounting Practice at Audit Commission in London (entity responsible for audits of local authorities in England and Wales) from 1980 to 1996.

5 IPSASB addressed the findings of the Wilkinson Report and recommended changes were, for the most part, successfully completed. Issues of oversight of the IPSASB and consultative processes are still under consideration. Policy positions on both these issues are moving forward for consultation with governments and other stakeholders and then to full public disclosure by IFAC in mid 2011.

6 Ernst and Young, "Toward transparency: A comparative study of governmental accounting in Europe", 2010.

7 It is widely recognized that the Conceptual Framework project is of critical importance to the next generation of IPSASs. The CICA-led Canadian engagement is intended to assist in aligning the IPSASB Conceptual Framework with the Canadian system and experience in public sector standards.