Accruals accounting marches on in the Public Sector
The International Public Sector Financial Accountability Index captures current and future use of public financial reporting bases and frameworks by 150 governments around the world. The latest report on the status of the Index by the International Federation of Accountants (IFAC) and the Chartered Institute of Public Finance and Accountancy (CIPFA) predicts a rapid expansion of the adoption of accruals accounting.
Whilst just 25% of governments currently account use the accruals basis, the report predicts that this may rise to 65% by the end of 2023, with governments in Asia, Africa, Latin America and the Caribbean leading the way. It is hoped that the move will improve government transparency, accountability and promote better use of public funds.
The report also forecasts a leap in the use (to some extent) of International Public Sector Accounting Standards (IPSAS), from 51% of governments that currently report on an accrual basis to 73% by the end of 2023.
IFAC and CIPFA plan to expand the Index in respect of breadth and depth of information, as well as to provide more frequent status updates over the next few years.
The full 2018 report can be accessed here.