Introduction
Pakistan Consortium on Governmental Financial Management, The Pakistan Consortium on Governmental Financial Management (the Society) was established on 28 August 1999. It is now an incorporated body with the registered office situated in Islamabad. The sponsors of the Society are ICAP, ICMA and the Auditor-General of Pakistan and the governing body consists of 12 members, four from each sponsoring organization.
Any person who is a member of ICAP, ICMA or any officer of the Auditor-General’s Department holding a post of B-17 or above may be admitted by the governing body as a member of the Society.
The main objectives of the Society are as follows:
FINANCIAL MANAGEMENT AND GOVERNANCE ISSUES IN PAKISTAN
· To promote and establish the Pakistan chapter of the International Consortium of the Governmental Financial Management to promote a better understanding of the professional financial management among public officials, at all levels of budgeting, data processing, debt administration, social safety net administration, tax administration and treasury management.
· To improve public financial management system by encouraging participation and affiliation of individuals and groups concerned with various specialized areas of activity of interest within a broad field of public financial management.
· To promote exchange of programs, information, documents and ideas relating to public financial management of systems nationally and internationally and develop and disseminate guidelines for professional public financial management.
· To provide a permanent organizational structure and mechanisms with national and international organizations, institutions and other bodies.
· To encourage sponsors, conduct or collaborate in appropriate research and publish results thereof, provide a clearing house of information relevant to financial management; undertake consultancy work both nationally and internationally and establish liaison with those organizations which are capable of promoting the objectives of the society.
· To promote understanding of public financial management as a basic responsibility of all public officials at all levels and providing a forum for discussion of common public financial management problems.
· To collaborate in the development of programs nationally and internationally involving sophisticated technologies, ensure professional quality and uniform criteria and provide quality control.
· To accept grants of money, sponsorships, donations, fees, securities or property of any kind, on such terms as deemed fit by the governing body.
· To provide help and assistance to Standing Committees of Senate, National Assembly and other committees whenever required.
· To organize training courses, seminars, workshops, technical meetings and other professional development events directed towards improving public financial management.
ACCOUNTING AND AUDITING STANDARDS
· To develop uniform, financial reporting formats, which ensure greater transparency, permit comparability and increase utilization of financial management information.
· To develop a code of ethics for establishing and maintaining high standards of integrity, honesty, morality, ethics and character among financial managers and staff members.
· To emphasize importance of professional management of scarce public financial resources and increase economy, efficiency and effectiveness of public sector activities, projects and programs.
· To send experts and representatives to other countries and invite representatives and experts of foreign countries, bodies, societies, institutions etc., having the same aims as the Society to attend conferences (local or international), meetings and functions to deliver lectures, etc.
· To make arrangements and take all necessary steps including entering into agreements with the governmental, national, provincial, local or municipal, or foreign institutions or individuals or other authorities at any place in which the Society may have interests and to carry on any negotiations or operations for the purpose of directly or indirectly promoting the purposes of the Society.
· The Society is in the establishment stage and Pakistan Audit Department is currently being used as the Registered Office and Secretariat. Arrangements are currently being made to hold an international seminar on one of the following topics:
· Asset management and asset accounting in the Public Sector.
· Towards a more efficient regulatory mechanism for the industrial sector.
· Managing the transition towards a market economy.
Brief about International Public Sector Accounting Standards
The International Federation of Accountants’ International Public Sector Accounting Standards Board (IPSASB) develops accounting standards for public sector entities referred to as International Public Sector Accounting Standards (IPSASs). The IPSASB recognizes the significant benefits of achieving consistent and comparable financial information across jurisdictions and it believes that the IPSASs will play a key role in enabling these benefits to be realized. The IPSASB strongly encourages governments and national standard-setters to engage in the development of its Standards by commenting on the proposals set out in its Exposure Drafts.
The IPSASB issues IPSASs dealing with financial reporting under the cash basis of accounting and the accrual basis of accounting. The accrual basis IPSASs are based on the International Financial Reporting Standards (IFRSs), issued by the International Accounting Standards Board (IASB) where the requirements of those Standards are applicable to the public sector. They also deal with public sector specific financial reporting issues that are not dealt with in IFRSs.
The adoption of IPSASs by governments will improve both the quality and comparability of financial information reported by public sector entities around the world. The IPSASB recognizes the right of governments and national standards letters to establish accounting standards and guidelines for financial reporting in their jurisdictions. The IPSASB encourages the adoption of IPSASs and the harmonization of national requirements with IPSASs. Financial statements should be described as complying with IPSASs only if they comply with all the requirements of each applicable IPSAS.
BRIEF ABOUT INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS Objective
IPSAS aims to improve the quality of general purpose financial reporting by public sector entities, leading to better informed assessments of the resource allocation decisions made by governments, thereby increasing transparency and accountability.
IPSAS are accounting standards for application by national governments, regional (e.g., state, provincial, territorial) governments, local (e.g., city, town) governments and related governmental entities (e.g., agencies, boards and commissions). IPSAS standards are widely used by intergovernmental organizations. IPSAS do not apply to government business enterprises.
IPSAS are issued by IPSASB (International Public Sector Accounting Standards Board), an independent organ of IFAC (International Federation of Accountants). The IPSASB adopts a due process for the development of IPSAS that provides the opportunity for comment by interested parties including auditors, preparers (including finance ministries), standard setters, and individuals. IPSASB meetings to discuss the development and to approve the issuance of IPSAS or other papers are open to the public. Agenda papers, including the minutes of the meetings of the IPSASB, are published on the IPSASB's website: www.ipsasb.org. Observers on the IPSASB meetings include ADB, EU, IASB, IMF, INTOSAI, OECD, World Bank, UN and UNDP.
Convergence of IPSAS with IFRS IPSAS are based on the International Financial Reporting Standards International Financial Reporting Standards (IFRS), formerly known as IAS. IFRS are issued by the International Accounting Standards Board (IASB). IPSASB adapts IFRS to a public sector context when appropriate. In undertaking that process, the IPSASB attempts, wherever possible, to maintain the accounting treatment and original text of the IFRS unless there is a significant public sector issue which warrants a departure.
The approved text of IPSAS standards is that published by the IPSASB in the English language. The IPSASB Handbook has been translated from English into a number of languages, including French [follow link], Spanish [follow link], German, Russian and Chinese. The Arab Society of Certified Accountants (ASCA) of Jordan issued an Arabic [follow link] version of the IPSASB Handbook. In addition, Brazil is working on translation of IPSAS into Portuguese. See [follow link] for more information. There are 26 standards on the accrual basis of accounting and one standard on the cash basis of accounting. Further standards are being prepared. When the accrual basis of accounting underlies the preparation of the financial statements, the financial statements will include the statement of financial position, the statement of financial performance, the cash flow statement and the statement of changes in net assets/equity. When the cash basis of accounting underlies the preparation of the financial statements, the primary financial statement is the statement of cash receipts and payments.
The impact of the credit crisis on public sector accounting
The credit crisis has raised several public sector accounting issues. Governments have extended credit to banks, guaranteed the liabilities of banks, purchased impaired debt instruments and in some instances have assumed control of banks. The unique nature of the credit crisis and the unprecedented response by governments around the world has reinforced the importance of high-quality standards for financial reporting by governments. The credit crisis has increased the need for accountability in the public sector and for transparency in its financial dealings.
IPSAS Adoption by neighboring Country
Afghanistan
Process in place to adopt IPSAS, first cash basis then accruals. Legislation passed.
Malaysia
The Malaysian Federal Government has adopted the cash basis IPSAS. Its financial statements for the year ended December 31, 2005 were prepared in accordance with the cash basis IPSAS, were audited by the Supreme Audit Institution of Malaysia and received an unqualified audit opinion.
Nepal
There is general consensus among policy makers, accounting professionals, and international organizations on the need for Nepal to adopt the cash basis IPSAS. Nepal has been developing Nepal public sector accounting standards by referring to the cash basis IPSAS in a close collaboration between the professional accountants and government officials. Attempts are being made to change the accounting regulations in order to incorporate the mandatory use of IPSAS.
Sri Lanka
The state annual accounts are prepared in accordance with the cash basis IPSAS since 2002. The incorporation of the additional accrual disclosures in the financial statements has been seen as a first step towards the accrual-basis of accounting. The government has expressed its commitment towards adopting the accrual-basis IPSASs for accounting and budgeting. The Government of Sri Lanka has requested that the Institute of Chartered Accountants of Sri Lanka prepare suitable accrual basis accounting standards for use by public sector entities. The ICASL's Public Sector Accounting Standards Committee has begun the process of developing Sri Lankan versions of the IPSASs, as at July 2009, five standards had been completed and forwarded to the Government.
India
The Government Accounting Standards Advisory Board is in favor of limited adoption of cash basis IPSAS for cash transactions and corresponding accrual IPSASs for those transactions recorded on other than the cash basis. A road map has been prepared for transition from the cash to accrual accounting system and an operational framework for its implementation. The possible transition towards accrual accounting has been planned incremental and in phases spanning from 10–12 years. The central government and the majority of Indian state governments have accepted the idea of accrual accounting. The Committee on Accounting Standards for Local Bodies is reviewing IPSAS with a view to their adoption.
The impact of the credit crisis on public sector accounting
The credit crisis has raised several public sector accounting issues. Governments have extended credit to banks, guaranteed the liabilities of banks, purchased impaired debt instruments and in some instances have assumed control of banks. The unique nature of the credit crisis and the unprecedented response by governments around the world has reinforced the importance of high-quality standards for financial reporting by governments. The credit crisis has increased the need for accountability in the public sector and for transparency in its financial dealings.
In Pakistan a Governmental Accounting Standards Board (GASB) or Pakistan Public Sector Accounting Standard Board (PPSASB) could be formed as in United States, under the auspices of the Commission/foundation consisting of Ministry of Finance, Auditor General of Pakistan, Pakistan Institute of Public Finance Accountants, Institute of Chartered Accountants of Pakistan and Institute of Cost and management Accountants of Pakistan to establish financial accounting and reporting and auditing standards for country, provinces and local government entities. These standards would be important because external financial reporting can demonstrate financial accountability to the public. They would be the basis for many legislative and regulatory decisions, as well as investment and credit policies. The foundation would responsible for selecting the any predetermined numbers of members of GASB/PPSASB and its Advisory Council, funding their activities, and exercising general oversight. Except for the chairman of GASB/PPSASB, all members could be part time.
GASB/PPSASB 's mission would be to establish and improve standards of country, provinces and local governmental accounting and financial reporting that will (1) result in useful information for users of financial reports and (2) guide and educate the public, including issuers, auditors, and users of those financial reports. To accomplish its mission, GASB/PPSASB would acts to:
1. Issue standards that improve the usefulness of financial reports based on (a) the needs of financial report users, (b) the primary characteristics of understandability, relevance, and reliability, and (c) the qualities of comparability and consistency.
2. Keep standards current to reflect changes in the governmental environment.
3. Provide guidance on implementation of standards.
4. Consider significant areas of accounting and financial reporting that can be improved through the standard-setting process.
5. Improve the common understanding of the nature and purposes of information contained in financial reports.
GASB/PPSASB would formulate and uses concepts to guide them in the development of their standards. These concepts would provide a frame of reference for resolving accounting and financial reporting issues. This framework would help to establish reasonable bounds for judgment in preparing and using financial reports; it would also help the public understand the nature and limitations of financial reporting. GASB/PPSASB would actively solicit and consider the views of its various constituencies on all accounting and financial reporting issues. GASB/PPSASB 's activities would be open to public participation and observation under "due process" procedures. These procedures are designed to permit timely, thorough, and open study of accounting and financial reporting issues. Consequently, broad public participation may encouraged in the accounting standard-setting process, which may permits communication of all points of view and expressions of opinion at all stages of the process. Use of these procedures would recognizes that general acceptance of the GASB/PPSASB conclusions is enhanced by demonstrating that the comments received during due process may be considered carefully.
GUIDING PRINCIPLES
In establishing concepts and standards, the GASB/PPSASB may exercises its judgment after research, due process, and careful deliberation. Some of the principles may be used by GASB/PPSASB could be as follows:
1. One of GASB/PPSASB 's overriding principles may be that it would be objective and neutral in its decision making. This principle ensures, as much as possible, that the information resulting from its standards is a faithful representation of the effects of federal, provincial and local government activities. Objective and neutral means freedom from bias, precluding GASB/PPSASB from placing any particular interest above the interests of the many who rely on the information contained in financial reports.
2. Another primary principle may be to weigh carefully the views of its constituents in developing concepts and standards. This would permits GASB/ PPSASB to (a) meet the accountability and decision-making needs of the users of government financial reports and (b) gain general acceptance among federal, provincial and local government preparers and auditors of financial reports.
3. A third principle could be to establish standards only when the expected benefits exceed the perceived costs. GASB/PPSASB would strives to determine that proposed standards (including disclosure requirements) fill a significant need and that the costs they impose, compared with possible alternatives, are justified when compared to the overall public benefit.
4. A fourth principle could be to consider the applicability of its standards to the separately issued general-purpose financial statements of governmentally owned special entities. GASB/PPSASB would specifically evaluates similarities of special entities and of their activities and transactions in both the public and private sectors, and the need, in certain instances, for comparability with the private sector.
5. A fifth principle could be to bring about needed changes in ways that minimize disruption of the accounting and financial reporting processes. Reasonable effective dates and transition provisions are established when new standards are introduced. GASB/PPSASB may considers it desirable that change should be evolutionary to the extent that can be accommodated by the need for under-standability, relevance, reliability, comparability, and consistency.
6. A final principle for now could be to review the effects of past decisions for appropriateness. This will permits continual interpretation, amendment, or replacement of standards, when deemed necessary.
International standard-setting body for the public sector is The Public Sector Committee of the International Federation of Accountants (IFAC-PSC) assumed responsibility in 1998 for developing a set of financial reporting standards to be adopted worldwide by public sector entities. More information is available from IFAC-PSC at 535 Fifth Ave., 26th floor, New York, NY;(212) 286-9344; or http://www.ifac.org/Committees/PublicSector/index.html.
International Public Sector Accounting Standards Summary
IPSAS | Standard | based on |
IPSAS 1 | Presentation of Financial Statements | IAS 1 |
IPSAS 2 | Cash Flow Statements | IAS 7 |
IPSAS 3 | Accounting Policies, Changes in Accounting Estimates and Errors | IAS 8 |
IPSAS 4 | The Effects of Changes in Foreign Exchange Rates | IAS 21 |
IPSAS 5 | Borrowing Costs | IAS 23 |
IPSAS 6 | Consolidated and Separate Financial Statements | IAS 27 |
IPSAS 7 | Investments in Associates | IAS 28 |
IPSAS 8 | Interests in Joint Ventures | IAS 31 |
IPSAS 9 | Revenue from Exchange Transactions | IAS 18 |
IPSAS 10 | Financial Reporting in Hyperinflationary Economies | IAS 29 |
IPSAS 11 | Construction Contracts | IAS 11 |
IPSAS 12 | Inventories | IAS 2 |
IPSAS 13 | Leases | IAS 17 |
IPSAS 14 | Events After the Reporting Date | IAS 10 |
IPSAS 15 | Financial Instruments: Disclosure and Presentation - superseded by IPSAS 28 and IPSAS 30 |
|
IPSAS 16 | Investment Property | IAS 40 |
IPSAS 17 | Property, Plant and Equipment | IAS 16 |
IPSAS 18 | Segment Reporting | IAS 14 |
IPSAS 19 | Provisions, Contingent Liabilities and Contingent Assets | IAS 37 |
IPSAS 20 | Related Party Disclosures | IAS 24 |
IPSAS 21 | Impairment of Non-Cash-Generating Assets | IAS 36 |
IPSAS 22 | Disclosure of Financial Information About the General Government Sector | N/A |
IPSAS 23 | Revenue from Non-Exchange Transactions (Taxes and Transfers) | N/A |
IPSAS 24 | Presentation of Budget Information in Financial Statements | N/A |
IPSAS 25 | Employee Benefits | IAS 19 |
IPSAS 26 | Impairment of Cash-Generating Assets | IAS 36 |
IPSAS 27 | Agriculture | IAS 41 |
IPSAS 28 | Financial Instruments: Presentation | IAS 32 |
IPSAS 29 | Financial Instruments: Recognition and Measurement | IAS 39 |
IPSAS 30 | Financial Instruments: Disclosures | IFRS 7 |
IPSAS 31 | Intangible Assets | IAS 38 |
Conclusion
It is my heartiest recommendation that the ‘Pakistan Institute of Public Finance Accountants’ should approach the Society (i.e The Pakistan Consortium on Governmental Financial Management) and the Government for being given the task of to create the Public Sector Accounting Standards Board.
Beside the above it is also recommended that a Research and Development Committee of the Professionals may be formed to analysis the adaptability of the International Standards on Accounting and Auditing in the environment of Pakistan and to propose a draft for adoption of the same. Likewise India mind-set has to be cultivated for the adoption of cash basis IPSAS for cash transactions and corresponding accrual IPSASs for those transactions recorded on other than the cash basis. A road map has to be prepared for transition from the cash to accrual accounting system and an operational framework for its implementation. While dealing with the road map The Role of the Regulator in the Interpretation and Enforcement of Public Sector Accounting Standards would also be the point of discussion.
PIPFA must continue to review its syllabus in order to cover all areas recommended by IFAC-issued International Educational Standards (IES). Mandatory Training Programs, Seminars and conferences should also be conducted.
use a website is to use it as a recruitment tool. You can obviously use it to post vacancies, but you may also consider placing a more general invitation to send resumes. This way you may already know the right person for the job offering in the market. As being done greatly by ICMAP:
use a website is to use it as a recruitment tool. You can obviously use it to post vacancies, but you may also consider placing a more general invitation to send resumes. This way you may already know the right person for the job offering in the market. As being done greatly by ICMAP:
Websites can make you student’s/member’s lives easier – and yours! Look at online banking, or ticket ordering. Whole new industries have emerged because people want to be able to do things themselves, from their home or office – because it is easier. So: what will make your student’s/member’s lives easier? So allow online fee payment and submission of various forms. . As being done greatly by ICAP: 
· Selected Opinions
Volunteer services could also be availed by the Institute by constituting Committees/Task forces as being in well mannered by AICPA:
· Past Papers 
