'Transparency crucial' for the public sector, says Philippe Peusch-Lestrade at ACCA’s Global Public Sector Conference | ACCA Global
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We are beginning to see a shift in thinking around the world about how public bodies report on their performance. We need to ensure that this drive continues so that open and transparent reporting becomes the norm for all public bodies irrespective of country or jurisdiction. Public bodies need to put public trust at the heart of financial and non-financial reporting
—Gillian Fawcett, head of public sector, ACCA

Lack of accountability and transparency must be addressed by governments in order to improve public trust, financial management and financial reporting

'Transparency is crucial in the informational age we live in. Governments need to be fully transparent in all decisions they make and concise in their communication if they wish to be seen as trustworthy' were the concluding remarks made by Philippe Peusch-Lestrade, Deputy Chief Officer from the IIRC at ACCA’s fifth international public sector conference.

Experts from the World Bank, the IIRC, the IMF and DG Eurostat spoke at the conference, which is available on ACCA’s website. Panellists revealed that investment in financial reporting improvements must be based on evidence of its impact on public trust. The panel discussion demonstrated a need for integrated thinking and a holistic approach to demonstrate a comprehensive picture of the public sector’s economical, ecological and social obligations. 

In the future, the public sector needs to focus on best practice of reporting methods to improve accountability and transparency. Although many countries in the developed and developing world are making significant improvements, experts agreed that much more needs to be done to improve many aspects of public financial management and financial reporting.

Mr. Peusch-Lestrade concluded: 'The case with many developing economies is the lack of proper means to implementing the necessary changes. There needs to be a shift in order to pass from a purely compliant, past based reporting towards prospective reporting. This shift will allow for greater understanding of the public. I cannot stress enough the importance of being concise, transparent and offering a meaningful report which fulfils the informational needs of all stakeholders.'

Some of the key obstacles to overcome were identified as being inertia, bureaucracy and political disinterest in reform. As transparent financial reporting supports the participation of governments in the capital markets, low levels of public trust and confidence were considered as not helping to improve the eradication of fraud and corruption. 

A recent global study conducted by PwC of 100 countries illustrates that there is a major shift expected in developing countries, with International Public Sector Accounting Standards (IPSAS) serving as a reference point. The results of the study also show that 50% of non-OECD countries plan to transition to accrual accounting in the next five years. 

Patrice Schumesch, Partner - Global Finance and Accounting at PwC said: 'Increased transparency is essential for the democratic accountability process. Similarly, adoption of harmonised high-quality accounting standards enhances the credibility of government financial statements.

'There is an urgent need for sound and transparent accounting by all governments. Government financial statements should reflect the full economic impact of political decisions. However, the conversion to accrual accounting is a multi-year project. Time is of essence to keep the momentum. You have to fast but not too fast. You also have to accept that reform will take several years and proceed in stages.'

Mr. Schumesch, concluded: 'The change to accruals-based IPSAS is much more than an accounting exercise. It is a transformation of the government finance function which impacts the whole organisations. A well-designed project and effective change management strategy, which considers people and systems requirements, are crucial for successful implementation.'

Gillian Fawcett, ACCA’s Head of Public Sector, said: 'The accountancy profession has an important role to play as custodians of the reputation of this essential sector. We have a clear role to promote open and transparent financial reporting by public services around the world. ACCA will continue to play a leading role in promoting a leading role in promoting high quality reporting across the sector as the global reporting landscape develops in the future.'

Ms. Fawcett concluded: 'We are beginning to see a shift in thinking around the world about how public bodies report on their performance. We need to ensure that this drive continues so that open and transparent reporting becomes the norm for all public bodies irrespective of country or jurisdiction. Public bodies need to put public trust at the heart of financial and non-financial reporting.'

- Ends-

For more information, please contact:

Lali Sindi, ACCA Newsroom
+ 44 (0) 207 059 5643
+44 (0) 7921 698085
lali.sindi@accaglobal.com 

Notes to Editors

  1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. 
  2. We support our 162,000 members and 428,000 students in 173 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 89 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence. 
  3. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.