Impact Assessment of International Public Accounting Standards (IPSASs) On Public Financial Management (PFM) In Africa

International Journal of Research and Scientific Innovation (IJRSI) | Volume VII, Issue X, October 2020 | ISSN 2321–2705

Impact Assessment of International Public Accounting Standards (IPSASs) On Public Financial Management (PFM) In Africa

  Zivanai Mazhambe

Post Doctoral Research Department, Bright Africa Consultancy Training

Abstract—Public financial management exhibits an integrated system of laws, conventions, concepts, principles and practices by sovereign governments through various stakeholders in the attainment of public sector objectives, with accounting playing a pivotal role. The study thereby seeks to assess the impact of International Public Sector Accounting Standards on the public financial management in Africa. The methodology adopted for this study was mixed research methodology, through questionnaires and interviews of randomly selected PAFA accountants across Africa. The majority of respondents concurred that IPSASs are central and pivotal in the attainment of objectives for sound and successful Public Financial Management. Respondents further reiterated that IPSASs are key in accounting for taxation revenue, non-tax revenue and donor funds through transparency and disclosure, which are essential for strategic policy interventions and public expenditure through the budgetary framework

Keywords— Public Financial Management, PFM in Africa, Public Sector Financial Management, Government accounting, IPSASs Implementations, IPSAS in Africa, PAFAs

1. INTRODUCTION

Public financial management exhibits an integrated system of laws, conventions, concepts, principles and practices by sovereign governments through various stakeholders in the attainment of public sector objectives, with accounting playing a pivotal role. The study thereby seeks to assess the impact of International Public Sector Accounting Standards on the public financial management in Africa.

2. LITERATURE REVIEW

Public financial management in government and its entities is aimed at disclosing financial information to the citizens and other users, through constant consultation and communication of financial and non financial information to ensure accountability and transparency (Wynne, 2007). The implementation of IPSAS in the United Nations system organisation (Biraud, 2012) revealed numerous benefits which were : standardization, harmonization and consistency (57.9%); quality (52.6%), comparability (47.4%) and improved transparency (84.2%).
Sovereign governments exhibits their stewardship role to the citizens and taxpayers through efficient and effective Public Financial Management (PFM) of public goods and services as an essential safeguard and enhancement of the country’s economic sovereignty (CAPA, 2014). The core elements of successful Public Financial Management are (CAPA, 2014): reporting, fiscal and policy framework, performance management, governance climate, capacity and capability, value system governance, legal and institutional governance framework, scrutiny and assurance. The accounting profession is responsible for playing a pivotal role in coordinating of these PFM core principles through encouraging transparency and accountability of national governments, thereby protecting public interest (CAPA, 2014).

The core of Public Financial Management is comprised of the office of the President, Finance Minister, Ministries, provisional and local governments with peripheral PFM stakeholders being Accountant General’s office, legislature, political parties, civil society, procurement bodies, academia and auditors (Lawson, 2015) . The key objectives of the PFM stakeholders (Lawson, 2015) are to formulate and manage public policy, budget processes, accounting and auditing thereby maintaining aggregate fiscal discipline, efficient strategic allocation of public resources, operational efficiency and accountability through due process follow up of democratic checks and balances.

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