In a new publication, It’s time… for global, high quality public sector financial reporting, the institute said that while lines are blurring between the public and private sector, there remains an imbalance in reporting requirements, which can affect investment decisions.
“When the global financial crisis (GFC) hit, we ended up with governments actually owning private entities,” Institute of Chartered Accountants Australia head of reporting policy Kerry Hicks told InvestorDaily.
“Also, the government issues bonds throughout the world, so they’re actually competing for money from investors like you and me,” she said.
“Are we looking for different information between corporate bonds or government bonds? No, we’re looking for comparable, consistent information so we can make a decision on what we would like to invest in.”
The report follows an announcement by the G20 this year that the International Monetary Fund and the World Bank would be pursuing the issue of reporting transparency to strengthen public sector balance sheets.
To achieve this, the Institute are calling for the integration of public and private sector reporting models through the development of a transaction-neutral conceptual framework.
Transaction-neutral conceptual frameworks are already in place in Australia and are guidelines that reflect the nature of a transaction irrespective of the entity involved.
“We have had that [in place] for quite a few years and we are one of the few countries around the world to have it,” Ms Hicks said.
“So in a way, what we are proposing here is actually in operation in Australia today.”
