NAOF contributing to the development of European accounting standards
European Commission is preparing harmonisation of Member States' public sector accounting standards. Should the harmonisation task be completed, the potential EPSAS accounting standards would be applied to all the entities in the Finnish public sector.
The European Commission (Eurostat) has started the development of joint public sector accounting standards for all EU Member States.
According to the Commission, the aim of the planned European Public Sector Accounting Standards (EPSAS) is to make financial information more transparent, harmonise accounting information provided by EU Member States and improve the comparability of the reporting of the financial position and performance of the Member States. The Commission has proposed that the international IPSAS accounting standards represent a starting reference for EU harmonised public sector accounts development work.
The National Audit Office of Finland is following the preparation of the EPSAS standards and is participating in the development work in collaboration with other national actors. In Finland, the public sector accounting standards are laid out by the Ministry of Finance, which is also responsible for drafting the legislation on local government finances. More detailed instructions on local government accounts are issued by the municipal division of the Accounting Board. The Ministry of Social Affairs and Health is responsible for the drafting of legislation concerning social security funds (including the distinctive features of the financial statements).
The work is based on Article 16 of the Council directive on budgetary frameworks (2011/85/EU).
The euro crisis has underlined the importance of reliable information on public sector finances
The crisis affecting the public sector finances in many euro area countries has shown that reliable information on public sector finances is important for national and supranational economic policy decision-making, functioning of the financial markets, the banking sector and monetary policy. Differences between the statistical data provided by individual Member States make it more difficult to make comparisons between the EU countries.
Harmonised and reliable information is particularly important in the Member States that are also members of the Economic and Monetary Union (EMU) as they have committed themselves to joint economic objectives. Differences in accounting practices between Member States also result in differences in the information base.
NAOF took part in the public consultation on the governance framework for EPSAS
In early 2014, the European Commission held a public consultation on the governance framework, principles and structures of the EPSAS standards. The consultation was open to all citizens and organisations. NAOF took part in the consultation as an independent supreme audit institution. Click the link below to read more about NAOF's views about the matter.
The aim of the European Commission is to introduce the EPSAS standards in the EU Member States by 2020. The Commission will issue a communication on the progress of the matter during 2014. The aim of the European Commission is to start drafting the framework regulation on the matter in 2015.
Further information: Tytti Yli-Viikari, Deputy Auditor General, tel. +358 9 432 5779, Nina Alatalo, Deputy Head of Executive Office and Fiscal Policy Audit, tel. +358 9 432 5785
NAO's views for the developing of the EPSAS governance framework:
Article 16 of the Council directive on budgetary frameworks (2011/85/EU)
Towards implementing European Public Sector Accounting Standards (EPSAS) for EU Member States - Public consultation on future EPSAS governance principles and structures