The Sunday Mail
Sunday Mail Reporter
THE International Public Sector Accounting Standards (IPSAS), which Zimbabwe adopted recently, will increase the quality of financial reporting in the public sector by providing a clear consistent framework, a development expected to promote transparency, an expert has said.
IPSAS refers to a set of accounting standards that can be used by public sector entities in preparation of their financial statements.
Presenting a document during an IPSAS and tax workshop organised by the Urban Development Corporation (UDCORP) in Harare last week, senior auditor Ms Fortune Chisoko said adopting IPSAS will help Zimbabwe align itself with global best practices in the public sector.
“The IPSAS standards apply to all public sector entities and these are customised for all the public sector entities to satisfy the requirements of financial operations and reporting,” said Ms Chisoko.
She said the framework for financial reporting will prescribe how public entities can account for foreign exchange differences.
“IPSAS 4, which talks about changes in foreign exchange rates, recommends how entities can account for foreign exchange differences in their financial records and books. These foreign exchange differences result from us, as a nation, using a hybrid system that involves use of the Zimbabwe dollar and the USD.
“For instance, we are required to report and present our financial statements in Zimbabwe dollars but most of our transactions are done in USD. When we convert the USD to Zimbabwe dollars, that’s where the foreign exchange gain or loss arises. So, entities are required to account for this in their books,” said Ms Chisoko.
UDCORP chief executive officer Mr Joey Shumbamhini said IPSAS will improve accountability in local authorities.
“Local authorities must be up to date with financial reporting and IPSAS actually brings standard reporting that makes Zimbabwe comparable to other nations in terms of how we report. So, the IPSAS that Government is introducing will improve efficiency in managing public funds,” he said.
The workshop ran under the theme “Enhancing understanding of IPSAS and tax matters in local authorities”.
Mr Shumbamhini said the workshop was necessitated by non-compliance with IPSAS in the analysis of statutory audit reports issued by the Auditor-General and UDCORP on the accounts of local authorities.
