As we slowly but surely approach D-day, the October general elections, we would like to once again bring up another issue that is worthy of a slot in the public discourse – financial accountability.
In the public sector, the lack of transparency and accountability continues to present a major risk to the efficiency of capital markets, global financial stability, and long term sustainability. We need to create greater public awareness among all levels of society.
From world leaders to policymakers and citizens, people must gain a better understanding of the importance of financial reporting in the public sector. If we want to build a society that is sustainable and stable in the long-term, we must be prepared to take responsibility for the changes that will be required to more effectively manage public sector resources.
A key issue for public sector financial reporting is that many governments still adhere to the cash basis of accounting, and therefore provide minimal disclosures relative to what the public, banks, investors, and credit providers generally expect of the private sector.
In a time when government reporting and transparency are being questioned, it is critical that governments work to establish—as a priority—greater trust between themselves and their constituents.
Governments uses taxpayers’ resources to invest in infrastructure and provide services and need to be accountable for how those resources are used.
To establish trust, it is important that governments provide accurate and complete information on assets and liabilities as well as revenues and expenses. Providing complete information on all transactions demonstrates accountability and stewardship; reinforces credibility; and provides clear and comprehensive information regarding the financial consequences of economic, political, and social decisions.