LONDON, June 12, 2014 /CNW/ -- Dr. Ian Ball, Chairman of CIPFA International and former CEO of the International Federation of Accountants (IFAC) and Central Financial Controller for the Government of New Zealand, strongly recommends that the Government of Greece implement generally accepted accounting principles (GAAP).
In advance of the New Era in Sovereign Accounting Symposium (NESAS) to be held in Athens on June 16th and 17th, Dr. Ball provided insights based on his experience working with and studying leading sovereign governments that are earning the benefits of good accounting. He also noted that countries operating dated and non-transparent accounting systems face a range of risks and perils, including a reduced ability to foresee and manage economic shocks.
Greece can gain immediate benefits from GAAP
Dr. Ball observed that the countries leading the world with the quality of their sovereign accounting and audit have earned significant benefits, including more sustainable economic growth, reduced taxation, better government performance, greater ability to withstand and rebound from economic shocks, and greater public confidence in the government. And, Greece can gain immediate benefits in improved investor confidence by making a serious and committed effort to implement IPSAS.
In regards to Greece, Dr. Ball commented:
"It is very hard to understand why any Minister of Finance looking for sound economic and fiscal management would not, in the 21st century, use the best available public financial management tools, in particular GAAP-based budgeting and accounting."
IPSAS is a cornerstone of sustainable growth for Greece
Greece badly needs to implement the gold standard of sovereign GAAP accounting, which is IPSAS (International Public Sector Accounting Standards), according to Dr. Ball. Since at least the early 1990s, Greece has experienced the consequences of bad government accounting. The Eurozone sovereign debt crisis was in no small part a result of Greece engaging extensively in "creative accounting", using accounting devices in an attempt to create fiscal illusion. This failure of accounting was one of the causes of the deep economic and social damage suffered by Greece over the past six years.
Dr. Ball noted:
"IPSAS is a cornerstone of sustainable growth for Greece and should be a top priority, now. Without good accounting, a country cannot have good decision-making, transparency, or accountability."
Japonica Partners, an avid supporter of international public sector accounting standards, commented:
"Dr. Ball is exactly right in pointing out the many false excuses given for not implementing good government accounting, including that accounting is too difficult for governments and pervasive accounting illiteracy is inevitable."
Dr. Ball and other global thought leaders will be discussing the benefits of good sovereign accounting and the perils of bad sovereign accounting during the NESAS in Athens on June 16th and 17th, 2014.
Dr. Ian Ball is Chairman of CIPFA International and former CEO of IFAC and Central Financial Controller for the Government of New Zealand.
Japonica Partners is an entrepreneurial investment firm that makes concentrated investments in underperforming global special situations.