The crisis has demonstrated the urgent need for governments to be more open, accountable and transparent regarding their financial stability. As a matter of urgency, member states should be seeking to publish financial reports which are accruals based, reliable, consistent and timely. 

ACCA supports the view that the long-term financial sustainability of public finances, based on the right long-term growth model, will play a critical role both economic recovery and preventing future crises. This improved economic governance goal should therefore be tackled more effectively. 

A concrete way of achieving this could be to require member states to produce government financial statements that consistently comply with international accounting standards, such as IPSASs, and which would complement current national accounts in setting out their economic and fiscal positions based on statistical measures and forecasts. 

Gillian Fawcett, head of public sector at ACCA, says:  'The continuing sovereign debt crisis further fuels the need for harmonizing accounting standards for member states.' 

Gillian Fawcett explains: 'The current diversity in financial reporting practice in the public sector is unhelpful. It is thus critical that all member states are capable of publishing a balance-sheet based on a consistent set of accounting standards to re-establish public trust, which has been seriously damaged. In that spirit, we strongly welcome the European Commission’s report on implementing across the EU a harmonised set of accounting standards using current international public sector accounting standards as a reference point. Accruals accounting is essential for promoting transparency, accountability and openness, as well as providing complementary information to existing statistically based national accounts.'

Gillian Fawcett stresses: 'ACCA is disappointed at the low response rate from key bodies to DG EUROSTAT’s initial consultation aiming to assess the suitability of the IPSAS for EU Member States. We however fully endorse the newly published report’s recommendation that further project and governance steps should be undertaken before any final decision is made to progress the development of a potential harmonised European Public Sector Accounting Standards (EPSAS) framework .'

'As a global accountancy body, we also think that it is important that any future work is closely co-ordinated with IPSASB (the International Public Sector Accounting Board), so as not to re-invent the wheel in setting up structures that are already in place and well recognised. We look forward to contributing to the debate,' Gillian Fawcett concludes. 

• Download The suitability of IPSAS for the Member States - Report from the Commission to the Council and the  European Parliament; and The suitability of IPSAS for the Member States - Commission Staff Working Document via the 'Related Links' section to the left of this article.
• Eurostat is hosting a conference on implementing European Public Sector Accounting Standards (EPSAS) in EU Member States on the 29/30 May 2013 in Brussels.