Ghana is to adopt the new accounting reporting standard to bring its public sector accounting practices in line with international standards. Adopting the International Public Sector Accounting Standards (IPSAS) for public sector accounting has become imperative, especially following revelations of alleged embezzlement at the public accounts committee sittings and Ghana's fast integration into the international financial system. IPSAS represents a set of high quality international accounting standards designed to meet the specific requirements of public sector institutions, which is also important in view of the country's fast integration into the international system. It is expected to make public sector accounting more transparent, reliable and trust worthy. The United Nations (UN) system for instance has declared 2010 for all governments, agencies, departments, and non-governmental organisations that deal with it to be IPSAS compliant, which means that the Ghana government has to take immediate steps to adopt IPSAS, which prescribes the preparation of accounts based on "accruals basis" and not on cash basis as is the case with Ghana's public sector. The Institute of Chartered Accountants Ghana, the regulator of accountancy practice in the country, and the chief accountant of government, the Controller and Accountant General's Department (CAGD), have gone their separate ways in preparing towards the adoption of the system, which is a segment of the International Financial Reporting Standards (IFRS) that went into operation in the country in 2006 for use by the private sector. At a sensitisation forum on IPSAS in Accra organised by the PriceWaterhouseCoopers, a consultancy firm, to stimulate discussion around the subject, it came out that while the CAGD had gone ahead to design what it said was IPSAS compliant manuals for public sector accounting and also formed a nine-member technical committee on the adoption of IPSAS, the ICA said it had shifted its date for preparation from 2009 to 2008. The forum was part of PWC's thought leadership programme to support the two bodies to work concertedly for the adoption of the system. The President of the ICA, Prof Ato Ghartey, said the institute would start preparations towards the adoption of IPSAS next month. He said there were some bodies whose existence would help the transition such as the moribund National Accounting Standards, which would be revived, as well as a National Affairs and Parliamentary Committee to serve as an advisory body on accountancy practice or regulation in the country. Prof Ghartey welcomed the idea behind the forum and said the outcome would help the institute to live up to its mandate. The Director of Public Financial Management Reform Unit of CAGD, Mr Daniel Domelevo, whose presentation was done on his behalf, said Ghana's recent involvement in major financial transactions such as the issue of the Eurobond, and the Millennium Challenge Account (MCA) made it imperative for the adoption of the IPSAS, which aimed at making public sector accounting more transparent and reliable. Mr Domelevo said implementing IPSAS in the country would require amendments to some laws as well as a massive investment in training, recruitment and systems. He said there were some inherent difficulties that the department also found in the adoption such as the valuation of some assets like heritage assets, for which reason the department had proposed the use of cash basis of accounting for 10 years before finally moving towards an accrual based accounting. The Country Leader of PWC, Mr. Charles Egan, called on the two bodies to collaborate towards introducing the system in the country. “There is a gap in implementation and we felt this stakeholders’ forum was needed to know about the road map to the adoption of IPSAS by the public sector,” Mr. Egan said. He reminded the stakeholders that the IFRS-IPSAS was not going to be business as usual as the standards were dynamic, changing by the day, saying, “once we sign on to it, we are on the international arena and since we cannot have our own standards we must take the right steps to move forward.” PWC’s Partner, in charge of Public Sector, Mr. Benson Okundi, said there was the need for a robust and effective change management, saying new systems would have to be adopted, human capacity sharpened, while technical support should be garnered to move the process forward. PriceWaterHouseCoopers said it would draw on its experience gained by supporting bodies such as the UN, the European Commission, OECD and the Swiss Federation to adopt the system to support Ghana's effort but said "we should have the political, financial and institutional will to implement the standards". Some of the challenges envisaged under the system include provisions for the recognition of non-exchange transactions such as gifts, printing of new accounting manuals, updating or completely changing information the technology backbone of accounting to conform to the new recording system, training of personnel as well as technical challenges. Source: Daily Graphic