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IPSAS: An African Odysseyhttp://opinion.publicfinanceinternational.org/2013/03/ipsas-an-african-odyssey/#commentsIf you are an African, a friend of Africa, a public financial management practitioner of African descent or a good governance and public accountability crusader in Africa, this is your time to rejoice. Your homeland is on to something new, noble and bold, as a wave of awareness sweeps through our continent.From the banks of the South Atlantic bordering the Cape of Good Hope through the rough hard tops of Zuma Rock to the wide, wild expanse of Tahir Square, change has met Africa in an unusual, unexpected but pleasant place. International Public Sector Accounting Standards (IPSAS) have made a triumphant entry into Africa. And Africa has, in turn, embraced IPSAS.IPSAS are a collection of public sector accounting standards issued by the International Public Sector Accounting Standards Board (IPSASB). Fashioned after International Financial Reporting Standards (IFRS), their private sector predecessor, IPSAS seek uniformity and consistency in public sector financial reporting across jurisdictions.In recognition of the immense challenges in adopting accrual-based IPSAS, the IPSASB issued a cash-based standard, ‘Financial Reporting Under the Cash Basis of Accounting’, first in 2003 and updated in 2006 and 2007. Countries and reporting entities are at liberty to adopt either the accrual- or cash-based IPSAS, although it’s easier and usually more practical to progress from the cash basis to accrual basis. Without question, the accrual-based IPSAS are the real thing and the ultimate goal of every IPSAS devotee.There is a popular but false notion that IPSAS adoption is all about consolidation of financial statements at central, state and local government levels. The fact of the matter is that IPSAS apply as much to the publicly-owned cottage hospital in a rural area as they do to the central government of any country.That is why, in designing a realistic and comprehensive implementation plan, a bottom-up approach, starting with individual budgetary units and public sector agencies, is recommended. It is only when the accounting processes and financial statements of the component units are IPSAS compliant that the resulting consolidated general purpose financial statements can be IPSAS compliant...Continue reading here...
