International Accounting Standards setter promotes holistic approach to public financial management, knowledge-sharing

Published: 3 July 2018

The Chairperson of the International Public Sector Accounting Standards Board (IPSASB) promoted the whole system approach to public financial management (PFM) as well as encouraged the Philippine Commission on Audit (COA) to share its good practices in developing accounting and reporting systems aligned with international standards.

International Public Sector Accounting Standards Board Chairperson Ian Carruthers (far right) accepts a token from Commission on Audit (COA) Commissioner Roland C. Pondoc while COA Assistant Commissioner for the Government Accountancy Sector Lourdes M. Castillo and Board of Accountancy Chairperson Joel L. Tan-Torres look on during the forum on public sector accounting and financial reporting held on 31 May 2018 at the COA Professional Development Center Auditorium.

IPSASB Chairperson Ian Carruthers discussed developments in public financial management and updates on the International Public Sector Accounting Standards (IPSAS) at a recent forum jointly held by the COA and the Professional Regulatory Board of Accountancy (BOA). IPSASB Deputy Director Ross Smith also gave updates on IPSAS while BOA Chairperson Joel L. Tan-Torres shared developments in the Philippine public accounting sector.

Around 150 COA officials and employees, representatives from the BOA, and some members of the board of directors of the Government Association of Certified Public Accountants, Philippine Association for Government Budget Administration, Inc., and Philippine Association of Local Government Accountants participated in the event.

Mr. Carruthers, who is also the Chair of The Chartered Institute of Public Finance and Accountancy (CIPFA) Standards, said the whole system approach framework to PFM developed by the CIPFA is a holistic model that complements existing assessment tools and provides checks and balances in every system as well as synthesis of ideas and key elements to work together to make PFM more effective.

 According to the CIPFA, the whole system approach framework provides leaders, managers and donors with a model of PFM outlining the necessary measures and controls to promote wise spending, tackle corruption and contribute to economic growth and long-term stability.

Mr. Carruthers emphasized the need for integrity, respect for the rule of law, accountability and transparency at all levels of governance which the whole system approach supports. He noted a unique aspect of public service which is the goal of achieving intended outcomes while acting in public interest all the time.

Mr. Carruthers also observed that the COA has many good practices in promulgating accounting standards, rules and regulations that need to be shared. He shared that the IPSASB has held roundtable discussions with various stakeholders to get inputs to the Board’s 2019-2023 Strategy and Work Plan. He said they have interacted with around 300 representative in the Manila leg of the roundtable discussions held at the Asian Development Bank Headquarters on 29-30 May 2018 which was the fourth and the last the Board has held. Mr. Carruthers encouraged the audience to use their skills in improving and influencing their respective organizations.

This sentiment was earlier disclosed by COA Commissioner Jose A. Fabia who observed that COA must be able to influence how international standards are developed through knowledge-sharing. He emphasized collaboration with international and local partners, observing that Supreme Audit Institutions provide insights on how international standards are set by various standards setting bodies.

(left) COA Commissioner Roland C. Pondoc and IPSASB Deputy Director Ross Smith at the forum on public sector accounting and financial reporting held jointly by the COA and the BOA.

In the same vein, BOA Chairperson Tan-Torres said that Filipino accountants’ voices should be heard in global issues, citing developments such as the ASEAN Mutual Recognition Arrangement and future trends in artificial intelligence where accountancy leaders should lead the revolution of change.

In line with the Philippines’ celebration of 95 years of the accountancy profession, Mr. Tan-Torres said the BOA is embarking on a six-point Expanding Horizons strategic plan focused on “upgrading the accountancy profession in the Philippines to levels that exceed global standards in the medium term.”

Being competitive globally was also emphasized by COA Commissioner Roland C. Pondoc who noted that COA continues to adopt IPSAS for implementation in the Philippines in order to be consistent with international standards and to be relevant in this platform.

IPSASB Deputy Director Ross Smith, for his part, discussed update the IPSASB 2019-2023 Strategy and Work Plan, including developments in public sector financial instruments projects and update on IPSAS 28-30 (IFRS convergence). Under its proposed Five-Year Strategy and Work Plan, the IPSASB aims to continue strengthening PFM globally through increasing adoption of accrual-based IPSAS. Mr. Smith shared that this Strategic Objective will be delivered through two main areas of activity, both of which have a public interest focus: (1) developing IPSAS and other high-quality financial reporting guidance for the public sector, and (2) raising awareness of IPSAS and the benefits of accrual adoption.

After a fruitful discussion with the IPSASB Chair and Deputy Director and BOA Chairperson, COA directors also had the opportunity to clarify issues on continuing professional development during the open forum. #