EU governments must get accounting basics right
European Union countries must get their public sector accounting basics right before adopting international high-quality reporting standards, says ICAEW, a leader in the accountancy and finance profession.
Public Accounts Committee right to call for greater flexibility in PFI schemes, says ICAEW.
In response to the Public Accounts Committee’s report into Equity Investment in Privately Financed Projects, ICAEW has called for the Government to take a more flexible approach and to make sure that contracts are actively managed from start to finish.
Tackling public sector deficits are key to restoring confidence in Government, says ICAEW report.
A collaboration between ICAEW and some of the world’s leading experts on fiscal policy from both the public and private sectors has revealed a four-point plan to help Government’s restore public confidence in their ability to tackle large-scale deficits.
Office for Budget Responsibility (OBR)
The Office for Budget Responsibility (OBR) was created in 2010 to support an independent assessment of the public finances and the economy, the public sector balance sheet and the long term sustainability of the public finances.
ICAEW supports the work of the OBR and more recently has submitted a response to the OBR’s fiscal sustainability report consultation in June 2011. The final annual report is expected to be published in July 2011.
Whole of Government Accounts (WGA)
On 29 November 2011, HM Treasury published the first set of UK Whole of Government Accounts (WGA). This data has been released at a significant time when many countries in the Eurozone are struggling to manage their national debt and ensure global economic stability.
WGA represents a new policy tool to help the UK Government and policy makers manage national debt. It complements existing fiscal indicators such as the Office of Budget Responsibility's annual evaluation of the UK's long-term public fiscal outlook. The UK is the first country to consolidate the whole of government on an accruals basis, using the international financial reporting standards (IFRS), drawing comparisons to how a listed company would disclose accounts.
Accountancy in public finances 2010
Improved financial management in government is crucial to restoring the public finances. ICAEW campaigns for transparent finances and effective use of public money.
In August 2010 Rt Hon Eric Pickles MP, Secretary of State for Communities and Local Government, announced plans to disband the Audit Commission, and realign the audit of local public bodies to meet the spirit of the localism agenda whereby local people can hold local bodies to account for local spending decisions.
This significant change to local audit is of relevance to our member and member firms and ICAEW is actively engaged in the following ways:
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Future of local public audit: Consultation, June 2011
ICAEW has recently responded to a request by the Department for Communities and Local Government to submit comments on the consultation Future of local public audit. The consultation requested feedback on the implications of proposals to make audit quality regulated within a statutory framework, overseen by the National Audit Office and the accountancy profession; and allow local public bodies to appoint their own external auditors with stringent safeguards for independence.
On Tuesday 29 March, Vernon Soare, Executive Director Professional Standards at ICAEW, gave oral evidence to the House of Commons Communities and Local Government Committee, as part of their inquiry into Audit and Inspection of Local Authorities. ICAEW’s key messages to the committee were as follows:
- Devising a new local audit regime to replace the Audit Commission presents the opportunity for local public audit to be aligned with other sectors and potentially opens up the market to new audit providers.
- Increasing the number of audit firms in local public audit should not be at the expense of audit quality and the safeguarding of public money.
- ICAEW is supportive of the localism agenda, however, there needs to be a balance between giving local electors powers over public money and putting proposals into place that will increase costs for all bodies concerned at a time of austerity and scarce resources.
- If there is to be a reduction in overall audit fees across this sector, there needs to be less regulation by different bodies and more consistency across and between the sectors.
- There is opportunity for some of the archaic practices that exist within local government to be addressed.