INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS BOARD FACT SHEET

What is the IPSASB?

The International Public Sector Accounting Standards Board (IPSASB) is an independent standard-setting board that develops high-quality International Public Sector Accounting Standards (IPSASs), guidance, and other resources for use by public sector entities around the world. The IPSASB is one of four independent standard-setting boards supported by the International Federation of Accountants (IFAC), the worldwide organization for the accountancy profession.

March 2012

What are the IPSASBs Objectives?

The IPSASB aims to enhance the quality and transparency of public sector financial reporting by: Establishing high-quality accounting standards for use by all public sector entities; Promoting the adoption of, and international convergence to, IPSASs; Providing comprehensive information for public sector financial management and decision making; and Providing guidance on issues, questions or challenges faced by public sector entities relevant to financial reporting.

The Sovereign Debt Crisis: A Call to Action

The sovereign debt crisis has made clear, as never before, the importance of improved and more consistent financial reporting by governments worldwide. As the crisis continues to affect governments around the globe, the IPSASB seeks to identify and share the steps urgently needed for meaningful reform. Strong and transparent financial reporting is in the public interestit has the potential to improve public sector decision making, hold governments more accountable to their citizens, and enhance global fiscal stability and sustainability. The crisis vividly shows that poor financial management by governments can have dramatic consequences, such as loss of democratic control, social unrest, and the failure by governments to meet their commitments today and in the future. The sovereign debt crisis should motivate us to achieve real reform. Solving it will require a coordinated, multifaceted, international approach that extends to the national level, as well as to the regional, state and local levels.

NYSE 2010 Trading Volume = $1,425 trillion

Equities $218mm MBSs $104mm

Why is Accrual-Based Accounting So Important?

Adoption of accrual accounting is a fundamental step governments must take to improve their financial reporting and public financial management. Accrual-based accounting practices improve the quality of financial information for all stakeholders (investors, taxpayers, ratepayers, public officials, suppliers, creditors, employees, the media, etc.), along with the quality of financial management, in several key ways. They reinforce the principles of transparency and accountability, provide an accurate and comprehensive picture of fiscal performance and positionincluding full details of debt, other liabilities, contingent liabilities and guarantees, and future expenditures and the resources needed to support themand reduce the risk of financial reporting fraud. Governments require that private sector companies report high-quality financial information on an accrual basis to their investors and stakeholdersbut most governments dont follow these same standards in their own accounting practices, despite the fact that their securities represent a large proportion of global capital markets and affect private citizens everywhere.

US Government Securities $1,100mm

Mutual Funds $3mm

IPSASs around the World

High-quality, uniform international standards help protect the public and investors in government bonds by ensuring that governments and other public sector entities are transparent and accountable, just as in the private sector. More than 50 governments, as well as other public sector entities around the worldof all sizes and at various levelshave adopted accrual accounting standards consistent with IPSASs or have announced plans to adopt them in the near future. And momentum around these standards is building, with the European Parliament currently studying the potential adoption of IPSASs by its member states. Some examples of countries and organizations that have adopted or that plan to adopt IPSASs include: Austria Brazil Costa Rica Estonia Indonesia Kenya New Zealand Peru Russia Slovakia South Africa Spain Switzerland Thailand The European Commissionfor their own financial statements The North Atlantic Treaty Organization (NATO) The Organisation for Economic Cooperation and Development (OECD) The United Nations system

How Does the IPSASB Set Standards?

The IPSASB consists of 18 volunteer members with expertise in public sector financial reporting. The members have diverse backgrounds, including representatives from ministries of finance, government audit institutions, public practice, and academia, and are balanced in terms of geography and gender, to best serve and reflect the public interest. The IPSASB follows a systematic and public due process in the development of IPSASs. All stakeholders interested in public sector financial reporting are invited to submit their views, and their comments are considered in the standard-setting development process. The IPSASB has observersrepresentatives of organizations that have an interest in public sector financial reporting, provide ongoing input to the work of the IPSASB, and have an interest in endorsing and supporting IPSASs. Current observers include: Asian Development Bank European Commission Eurostat International Accounting Standards Board International Monetary Fund International Organization of Supreme Audit Institutions Committee on Accounting Standards Joint Pension Administrative Section of the Co-ordinated Organisations Organisation for Economic Co-operation and Development United Nations United Nations Development Programme World Bank

For more information on the IPSASB, including all current projects, please visit the website at www.ipsasb.org.

About IFAC
IFAC (www.ifac.org) is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 167 members and associates in over 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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