By the PF International team | 4 November 2014
Fayezul Choudhury believes accountants can seriously influence politics as well as economics, and decidedly for the better, he told Public Finance International ahead of next week’s World Congress of Accountants.
‘Accounting methods have a direct impact on voters, because they can have an impact on the services that governments provide to taxpayers. If governments don’t know what they can afford, they make poor decisions, which can ultimately compromise the services that taxpayers have come to expect,’ the chief executive of the International Federation of Accountants said.
At the heart of this is accrual accounting, said Choudhury. ‘By informing taxpayers of this issue as well as putting pressure on politicians and public servants, accountants play an important role in the adoption and implementation of accrual accounting.’
He said he hopes that public sector accountants will leave the World Congress of Accountants ‘with renewed vigour’ to project this message.
‘This year’s WCOA will offer sessions on best practices in accrual accounting and fiscal sustainability in the public sector to help educate participants on why this is so critical,’ he said.
Many politicians may be opposed to government transparency and accountability, said Choudhury. ‘But if we’ve learned anything from the sovereign debt crisis, it’s that insufficient transparency and accountability, as well as poor public finance management and reporting, have dire consequences.’
‘We know governments are not risk-free. The economic impact of fiscal mismanagement jeopardises both the interests of the public as well as investors,’ he said.
‘This stresses the need to take key steps towards meaningful reform of accounting standards.’
IFAC is pursuing this agenda on a number of fronts, including through its Accountability Now! initiative, which promotes awareness about enhanced public sector reporting and financial management.
IFAC is also raising the centrality of improved public financial management for sustained growth at the G20 leaders’ summit in Brisbane, Australia, on November 15-16.
‘A strong, vibrant accountancy profession is essential across all parts of the globe,’ notes Choudhury, in IFAC’s submission to the summit.
Along with member organisations, the World Bank and the donor community, IFAC is looking to develop that capacity worldwide, particularly in developing and emerging nations.
