25-26 January 2016
Aim and background
The workshop examined the extent of, and scope for, convergence between financial accounting, budgeting and macroeconomic statistics, and its impact on the relationship between these disciplines and auditing.
Speakers came from universities, accounting and financial reporting standard-setters, audit firms, international and EU bodies, national ministries and audit institutions, as well as external users of government reporting.
The workshop was attended by ECA staff involved in financial audit and financial and economic governance issues, together with representatives of other EU bodies with experience in financial accounting, budgeting and/or government statistics, private audit firms and Supreme Audit Institutions from across the EU.
Speakers presented the current state of public institutions' information systems in the three public finance areas of budgets, financial information on an accrual basis, and aggregate statistics and accounts. This led to an examination of the scope for increased coordination, comparability and possible integration of these three areas.
The reforms in these areas may respond to challenges from auditors and also pose new challenges for the audit profession. The workshop therefore examined the role of audit institutions in advocating reforms and in adjusting to them.
Finally, it considered the response of audit institutions to the demands and needs arising from new technical realities and public management and policy objectives.
A one-day workshop, starting at 14.00 on 25 January 2016, with two plenary and five parallel sessions (see programme).
25 January 2016
The first afternoon was devoted to the three major information systems in the public domain: financial accounting, budgeting and macroeconomic statistics. The opening session presented the broad lines of these three systems: the roles of the major players, the relationship between them and their development, together with their interconnections, harmonisation of criteria and possible integration. The three subsequent parallel sessions further explored their relationships and challenges:
IPSAS and EPSAS: lovers or rivals? The objective of this session was to discuss the potential for, and obstacles to, the adoption of accrual-based financial reporting by public entities on the basis of international standards. It focused on the reform process and the reasons given for further reforms. Speakers presented the experiences of countries and institutions adjusting (or not) their financial reports to an accruals basis, and reflected on the costs and potential benefits of the possible development of EPSAS.
Next steps in budgeting: accruals and performance? This session focused on the analysis of developments in budgeting, implementation processes and the approach to accruals-based information. It updated participants on the efforts to modernise budgeting over recent decades, and the introduction of non-financial performance information and its reporting in financial statements.
Government finance statistics and financial accounting: strangers or brothers? The role of national accounts and government finance statistics data has grown with the crisis and requires increasing attention from the preparers and users of government reports. This session explored the extent to which this information can be corroborated with the (audited) financial and budgetary information of public entities. It also analysed the links between the figures derived from the budgetary, financial and statistical information systems.
26 January 2016
The morning session on Tuesday 26 January started with a keynote speech on the fiscal union and the need for accurate macroeconomic statistics, followed by two parallel sessions on the role of auditors in advocating and adjusting to reforms in accounting:
Auditors advocating reform: The objective of this session was to analyse the audit profession's contribution to innovations and reforms in the budgeting, preparation and disclosure of public entities' financial statements, and the use of aggregate accounts and public finance statistics. The session focused on the auditors' participation in designing reforms and to what extent they stimulate innovation and the adoption of new accounting rules and practices by the auditees. The speakers presented specific experiences of the audit institutions' contribution to the reform of government accounting systems.
Auditors adjusting to reform: In the public sector the introduction of accruals accounting can have profound implications for existing public sector auditors – to the extent of causing some observers to question whether they should retain their role. The interconnected increase in the production of consolidated “whole of government” accounts raises further issues. This session looked at the changes auditors make to meet the professional challenge and to remain relevant. In addition, external and internal pressures are leading to changes in the nature of the audit opinion. This session looked at the implications in the public sector.
The workshop closed with a plenary session, where the speakers discussed the current situation in public administration in view of ongoing reforms and the challenges for the near future.
IPSAS and EPSAS: Lovers or rivals ?
Next steps in budgeting: accruals and performance ?
Government finance statistics and financial accounting: Strangers or brothers ?
Auditors advocating to reform:
Auditors adjusting to reform:
See biographies of speakers