In a significant move toward accounting clarity and better financial management, the General Assembly of the United Nations has resolved to adopt International Public Sector Accounting Standards and shift from partial accrual to full accrual accounting.The effects of the change will ripple around the globe, as governments recognize the authority of the international standards.

Jayantilal M. Karia, U.N. director of accounts in the Office of Programme Planning, Budget and Accounts, said, "Adoption of IPSA standards into the U.N. system organizations is expected to provide uniform accounting policies and financial reporting across the U.N. system."

The International Public Sector Accounting Standards Board, which operates under the aegis of the International Federation of Accountants, issues standards for use by governments and other public sector entities around the world. The United States is not among those nations that comply with the standards, but the Governmental Accounting Standards Board supports and contributes to their development.

IFAC chief executive Ian Ball said that the U.N. resolution is important in two ways - for the United Nations itself, and for U.N. members, which are the governments that institute national accounting standards.

"This is important from the U.N. perspective because it provides them with a single set of standards that are well respected and understood outside the United Nations, so [its] financial reports are much more understandable to external parties, and they have better information for internal management," Ball said. "The second dimension is ... while IFAC doesn't have the authority to require compliance with its standards, the fact that the United Nations has adopted them provides a level of authority that encourages national governments to report under those high-quality standards."

One day after the U.N. announcement, Canada's Treasury Board announced that it would donate $1 million to the IPSASB in five annual allotments of $200,000, and the Canadian Institute of Chartered Accountants agreed to provide dedicated professional support to the standard-setter.

Beginning in September, some of the board's staff, including its new technical director, Stephanie Fox, will work out of an office in Toronto. CICA president and chief executive Kevin J. Dancey called the move "a huge vote of confidence in Canada's standard-setting abilities."

Guidance on ethics

In a separate but concurrent move, IFAC proposed new guidance on developing ethics education. If adopted, the guidance will apply to programs developed by IFAC's 163 member bodies in 120 countries.

International Accounting Education Standards Board chair Henry Saville noted that while the guidance does not present an international perspective on ethics, the topic is certainly universal in the profession. "There are cultural differences in approaches to ethics, but what we are trying to promote in this practice statement is the importance of understanding what ethics is about, identifying situations where ethical issues come to the fore, and approaching an ethical dilemma in some sensible, logical and consistent fashion," Saville said in a telephone interview from Belfast, Northern Ireland.

The proposed statement, Approaches to Developing and Maintaining Professional Values, Ethics and Attitudes, which has been issued as an exposure draft, will help IFAC member bodies meet the requirements of International Education Standard 4, Professional Values, Ethics and Attitudes, by linking it to the IAESB's ethics education framework.

The proposed standard details best practices and the assessment of ethics education programs, emphasizing the importance of workplace learning and practical experience.

As an IFAC member, the American Institute of CPAs will be expected to follow the ethics guidance.

Bea Sanders, AICPA vice president of academic and career development, said that the institute's senior education committee will be submitting comments and will make the final statement available to educators and the preparers of professional education materials.

"Ethics education must be a lifetime commitment that begins with educational preparation for the profession and continues throughout one's professional career," Sanders said. "The AICPA in general supports the proposed IFAC practice statement that creates a framework for learning ethical behavior in the classroom and the workplace and provides very useful guidance on the delivery of ethics education in both these environments."

IFAC is also developing a toolkit with prescriptive guidance designed to help organizations devise or improve educational programs in ethics.

The IAESB requests comments on the proposal by Dec. 15, 2006. Copies may be downloaded at

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