THE INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS: A STEP TOWARDS IMPROVING PUBLIC FINANCE MANAGEMENT TRANSPARENCY AND ACCOUNTABILITY BOYKO KOSTOV, ICPAB President

Институт на дипломираните експерт-счетоводители в България IFAC/IPSAS/ICPAB The Institute of Certified Public Accountants in Bulgaria is a full member of the International Federation of Accountants /IFAC/, which develops the International Public Sector Accounting Standards /IPSASs/. With regards to this and as a part of its individual membership compliance action plan the ICPAB seeks to promote and explain the benefits of implementing a clear framework for preparing and presenting public sector financial statements.

Институт на дипломираните експерт-счетоводители в България IPSAS’s Aims Currently the IPSASs are the only internationally recognized set of public sector accounting standards. They are developed on the basis of the International Financial Reporting Standards /IFRS/, which are generally applied in the real economy. The IPSAS aims are: to improve financial management; to improve the quality of financial reporting; to increase the transparency and to achieve a higher credibility of financial reports;

Институт на дипломираните експерт-счетоводители в България ICPAB’s perspective Full implementation of the accruals principle in the public sector. The advantages: Overall accounting framework will be implemented with clear rules on public sector financial statements preparation; The application of this framework allows the disclosure of the required information about contracts in progress and the respective potential obligations assumed by budget-financed enterprises that would have an effect in subsequent reporting periods;

Институт на дипломираните експерт-счетоводители в България ICPAB’s perspective This would enhance to a considerable degree the quality of audits of budget-financed entity’s financial statements since every audit provides an opinion on compliance /true and fair presentation/ with a defined accounting framework for financial statements preparation and presentation; This would result in material enhancement of quality control. Application of the accruals principle is the global approach to modernize public finance management. By applying this principle, both a higher credibility of financial statements and an opportunity to present required information in a timely manner are being achieved. As a final effect, an enhanced comparability of financial statements over different reporting periods would also be achieved.

Институт на дипломираните експерт-счетоводители в България IPSAS or EPSAS? The basic issue IPSAS or European Public Sector Accounting Standards /EPSAS/? The IPSAS or EPSAS adoption issue cannot be resolved by a single act. What we need is not only a strong political will, but very serious and effective preliminary preparations and subsequent work to implement such a difficult reform in public finances.

Институт на дипломираните експерт-счетоводители в България Steps and conditions Steps: National Audit Office, ICPAB and UNWE – organized discussions on IPSAS adoption. Conditions: Strong political will; Taking into consideration the opinion and the position of all interested parties through a public consultation process; Elaborating a road map for the step-by-step IPSAS implementation; Organizing training courses for all the public sector servants; Ensuring a relevant IT support for the whole implementation process.

Thank you for your attention!