Most of the OECD Countries use Accrual Accounting while preparing their Financial Reports
As per a study conducted by the IFAC and the OECD, almost 75% of the OECD countries use accrual accounting when preparing their year-end financial statements. According to the research the annual budgets of more than 25% of the countries are prepared on accrual basis.
The research highlighted the fact that most of the OECD countries have been able to transform and modernize their financial reporting system and practices in the past few decades. There has also been improvement in audit procedures and techniques. The standard setting process and procedures have also been improved significantly and all this has been achieved basically due to a number of reforms that has been made with regards to the accounting profession
The research also points out that in most of the cases the adoption and use of accrual accounting means that the published audited accounts of the governments are prepared in accordance with well-defined accounting standards.
The rate of national governments opting to directly adopt standards such as International Financial Reporting Standards (IFRS) or International Public Sector Accounting Standards (IPSAS), still continues to be low. The study also pointed out that many national standard setting bodies use IFRS or IPSAS as primary examples when developing standards to be implemented in their countries.
As part of the research the budgeting and accounting practices followed at national government level were also examined, the benefits and problems connected with the reforms for accrual accounting were discussed as well. The study also took in to consideration the steps which different OECD countries are planning to take so that to improve the way in which the accrual information is being used currently.
According to the CEO of IFAC, Fayez Choudhury, it is essential for governments to improve the quality of their financial reporting so that to make sure that the fiscal decisions that are to be made by the governments are based on information that is not only up-to-date but also accurately reflects the government’s financial position.
- Global Ethics Code Playing Catch Up with Latest Technology Developments
- Regulator Launches an Inquiry into Operations of a Birmingham Based Charity
- Leading UK Furniture Business Collapses into Administration
- ICAEW Signs MoU with ICAI
- Companies House Updates the Penalty Appeal Proceess for Late Filing
- In The Next Recession, You Can Make Money Rather Than Lose It
- Internet Security: How to Prevent Attacks on the Network