In an ever more complex, globalised world, accountants need to join the public finance dots. A whole systems approach will help them rise to the challenge

Managing public sector finances is about much more than accountancy. It is integral to every country’s financial health. Internationally, good public financial management can change the lives of some of the world’s poorest people and enable governments to raise finance and allocate resources.

Rarely have these issues been so important. As the World Congress of Accountants gathers in Rome, debates over austerity, growth, inequality and sustainability are intensifying across the globe.

Whatever a country’s level of development or economic circumstances, its citizens will rightly keep raising the bar when it comes to public service delivery. Meanwhile, pressures on national budgets are huge – not least due to the fallout from the global financial crisis. This special edition of Public Finance International explores many of these questions in some detail.

Whether discussing sustainable accountancy, integrated reporting, fiscal transparency, or international standards – or the battle against corruption and fraud – a common theme emerges: how to make global accountancy fit for purpose?

This is where a whole systems approach comes in. In CIPFA’s view, it is only by taking a holistic view of PFM – and firmly focusing on the public sphere – that we will improve service delivery in an increasingly globalised world.

The underpinning principles for this are set out in CIPFA's guidance series Keystones for public finance. They focus on the organisational architecture, analytical framework and systems of governance that are a precondition for effective financial outcomes.

CIPFA and the International Federation of Accountants have also worked together to develop an International framework for good public sector governance to help further these ends. This system of checks and balances stresses the organic links between different elements of service delivery, whether to individuals, communities or the public at large.

In the international development context, a whole systems approach also helps generate results that can meet demanding donor objectives. Above all, whole systems thinking means seeing the bigger, infinitely more complex picture.

The Prince’s Accounting for Sustainability Project – featured in this issue – has repeatedly stressed how economic growth depends on healthy communities and environments. The Prince of Wales has personally called for new ways to define and measure economic success.

One way of answering that call is via the Integrated Reporting initiative. This brings together information about public sector organisations’ strategy, governance, performance and prospects in a way that genuinely reflects the context within which they operate. It confirms that we need to develop new standards, techniques and stewardship to help the profession raise its game.

CIPFA is excited at the possibilities posed by this challenge. The Rome conference presents an ideal opportunity to engage with each other to turn this vision into reality.

This article appears in the Winter 2014 issue of Public Finance International magazine