In the backdrop of the 2014 World Congress of Accountants (WCOA) in Rome, International Public Sector Accounting Standards Board (IPSASB) member and EY partner Thomas Muller-Marques Berger told The Accountant that auditors from the private sector can make a significant contribution to transparency in public finance.
Muller-Marques Berger told TA that accrual based accounting standards in the public sector were a prerequisite for transparency in government’s spending. And despite the critics that said IPSAS were not gaining momentum he said the IPSASB was not unsatisfied with the level of adoption.
"Things can always go faster, but it has to be sustainable. Therefore it needs thorough discussion, and all concerns need to be heard and addressed," he said. "So it takes time, but compared to where we were six years ago when we had the financial crisis, we made huge improvements."
Muller-Marques Berger argued that all governments should be looking into publishing balance sheets and have their financial figures independently audited. "There is no difference between private and public sectors when it comes to the need of independent audit," he said. "The issue of whether this [the audit of governments’ finances] is done by a firm from the private sector or whether it is a knowledgeable supreme audit institution is not really important."
Asked if there was no ethical issue in having the private sector giving assurance on public sector financial data, Muller-Marques Berger argued that what mattered were the auditing standards applied and to have trained, knowledgeable auditors which according to him is the case in private practice as much as supreme audit institutions.
"In many cases, or in most cases, when private sector audit firms do the audit, they do it on behalf of the supreme audit institution and often for capacity reasons," he said adding that in the end it’s always the supreme audit institution giving the last stamp.
"Therefore I don’t have a problem with private sector firms being involved; to the contrary, I think we can contribute a lot in how to perform audits, due to capacity restrictions in the public sector."
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By GlobalDataRead the full interview here:
Politicians are the ones who should support accrual accounting: Muller-Marques Berger
