IPSASB: international public sector conceptual framework documents

Comments from ACCA to the International Public Sector Accounting Standards Board, June 2011.


ACCA provided supportive comments on IPSASB’s previous consultation paper in 2008, which formed the draft of this Exposure Draft. We welcome the work that IPSASB is undertaking to establish a conceptual framework which will make explicit the concepts, definitions and principles that will be applied in developing public sector accounting standards (IPSASs). We are also pleased to note that the IPSASB is closely monitoring the development of IASB’s conceptual framework and any potential implications it may have for public sector reporting.

Specific matters for comment

1. Role, authority and scope of the conceptual framework

We agree that a more comprehensive scope for financial reporting is necessary to ensure that financial information responds to users needs and will allow financial reporting to evolve and develop in the future. We also agree that this should be addressed through non-authoritative guidance.

2. Objectives of financial reporting by public sector entities and the primary users of GPFRs of public reporting entities

In our view this section goes on at great length to arrive at a conclusion on who are the primary users of financial statements. Although citizens (quite rightly so) have been identified as the primary users of financial statements, we are concerned that the Exposure Draft is only reflecting on them as service users. As a result the Exposure Draft fails to capture wider accountability to the public/citizens as a whole for ensuring that their taxes are spent wisely and represent value for money. In our view this section is confusing and would benefit from some clarification.   

Also, we have concerns that the Exposure Draft underplays the importance of the role of the Legislature as a primary user of financial statements. In our experience Parliament is the most engaged user of financial statements and its engagement is critical for accountability of the stewardship of public funds. The Exposure Draft gives inadequate recognition to the institutional context in which governments operate and the role of Parliament in ensuring accountability. In our view this needs to be addressed in the conceptual framework.

3. Qualitative characteristics of, and constraints on, information included in GPFRs of public sector entities. In particular, whether:

  1. 'Faithful representation’ rather than 'reliability’ should be used in the Conceptual Framework to describe the qualitative characteristic that is satisfied when the depiction of an economic or other phenomenon is complete, neutral, and fee for material error; and
  2. Materiality should be classified as a constraint on information included in GPFRs or as an entity specific component of relevance

4. We agree with the proposed qualitative characteristics and constraints on financial reporting. Therefore, we agree with 'faithful representation’ rather than 'reliability’ and the classification of materiality as a constraint.

5. The basis on which public sector reporting entity is identified and the circumstances in which the entity should be included in the group reporting entity

We agree with how the conceptual framework addresses the above.