Put governance and PFM on G20 agenda, says IFAC

1 Sep 16

G20 leaders should champion stronger governance and public financial management following the upcoming summit in Hangzhou, China, according to the International Federation of Accountants.

IFAC issued a call for action to the G20 earlier this week, imploring the leaders of the world’s most powerful economies to promote measures to rebuild public trust in public and private institutions and strengthen the recovery of the world’s increasingly interconnected economy. 

“The global economic recovery is uneven, and social and political destabilisation risks remain high in many parts of the world,” said Fayez Choudhury. 

“To fortify that recovery, citizens and markets urgently need to see greater transparency across all organisations, which will help restore trust in the institutions that help underpin the world’s financial markets.”

The call for action was based on a number of key themes that IFAC suggested the G20 prioritise in its communiqué. 

The first two, related to rebuilding trust and integrity, were to promote stronger governance and enhance public sector financial management, by actively encouraging and facilitating the adoption of accrual-based accounting and standards like IPSAS. 

The Financial Stability Board should also encompass the public sector, IFAC continued, and a working group should be established to examine public sector financial reporting, transparency and accountability. 

Integrated reporting should also be promoted and its principles embraced for a more coherent corporate reporting system and a more effective global economy, it said. 

Another key factor hindering the effectiveness of the global economy is regulatory fragmentation, which IFAC noted stifles growth. 

It called instead for greater cooperation and consistency in the global regulatory environment, and outlined a number of key principles for good regulation including evidence-based assessment, active oversight and transparent and open consultation. 

Finally, IFAC said the G20 should call for more global cooperation on the issue of taxation, and establish a permanent secretariat in order to enhance its own capacity to follow through on the consensus achieved in its discussions and ensure continued momentum. 

“The G20 has new opportunities to create an environment of sustainable, inclusive growth that benefits the world’s citizens,” said Choudhury. 

“IFAC has consistently urged policy consensus and ongoing cooperation between government, business and the regulatory community. On behalf of the global profession, we renew that call today and ask the G20 to put trust and transparency at the heart of the world’s economy. 

Read more about IFAC’s call for action in an interview with Fayez Choudhury here.

Did you enjoy this article?

Related articles

Have your say


CIPFA latest

Most popular

Most commented

Events & webinars