ACCOUNTANCY boards have hailed the planned introduction of the International Public Sector Accounting Standards (IPSAS) by 2023, pledging to assist with the requisite training prior to its adoption.
BY FIDELITY MHLANGA
Last week, Accountant-General, Daniel Muchemwa announced the ambitious plan to introduce the new accounting standard in five years, despite it requiring about 10 years to implement.
“Our plan is to introduce the IPSAS by 2023; that’s an ambitious plan. I know it requires about 10 years, but we were denied the credibility of ambition. We will try and make sure we achieve this by 2023. We need to begin to think about competence, to begin to appreciate that there are some skills which are required of public sector accountancy,” he said.
IPSAS focuses on improving the quality of general purpose financial reporting, leading to more informed and fiscally-efficient decision-making by governments, while simultaneously increasing transparency and accountability.
Public Accountants and Auditors Board (PAAB) chairperson, Brian Njikizana said the new standard was more holistic than the current cash basis accounting method. In cash basis accounting, revenues are recognised when cash is received and expenses are recognised when paid.
“It’s more holistic, for example, at the moment government has not accounted for assets. When you use the IPSAS, we use the assets, like how many dams. I know we know them, but we must know them by value as well. What are our liabilities as well as a country so that we make informed decisions? Cash accounting is not a modern way of doing things,” he said.
Njikizana said he would work with the government to offer training for the new standards, adding there was reason for the government to embrace it when local companies are doing it.
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“There is cash accounting and accrual.
IPSAS is the destination; cash accounting and accrual are like stations on the way to get to IPSAS. As PAAB we will help the Auditor-General, the stakeholder engagement and will do the training in the all those who will use IPSAS. Our role is to set the standard and make it compulsory,” he said.
Institute of Chartered Accountants of Zimbabwe CEO, Matts Kunaka said by embracing the standard of accounting, the country will now capture both paid and unpaid expenses and revenue received and expected.
“Advantages of using IPSAS over the current cash basis accounting are that, by using accruals IPSAS, it means that the country will have total view of its expenses both paid and unpaid and revenues received and still expected,” he said.
Kunaka said it was feasible to adopt the standard in five years given, that they were partners on board to work with government.
“What is need for now till 2023 is that there is need to professionalise the accountants in the civil service. Some have experience, but no professional qualifications,” he said.
