Cost Accounting for Governments Subject of New IFAC Study
The International Federation of Accountants (IFAC) has released a new study to assist government financial aid officers and other government accountants in their efforts to develop and implement cost accounting. Developed by IFAC’s Public Sector Committee (PSC), the new guidance provides governmental perspectives of cost accounting not available elsewhere, although it is not an in-depth study of the subject of cost accounting.
Entitled ‘Perspectives on Cost Accounting for Governments’, the study includes the following:
- Descriptions of the extent of governmental uses of cost accounting, recent growth, and prospects for future growth.
- Explanations of cost concepts that are relevant to various management objectives.
- Discussions of accounting standards issues where the resolution may affect the values used in the cost accounting exercise.
- Description of how specific concepts and processes might be applied in designing and implementing a cost accounting system.
- Discussions of major issues of importance to senior management.
In discussing the need for this new study, PSC Chairman Ian Mackintosh points out: «Although great similarities exist between the public and private sectors, a number of governmental cost accounting issues have not yet been dealt with comprehensively in existing literature. The need to overcome this gap in the literature and provide a governmental perspective is accentuated by today’s pressures on governments to deal with shrinking budgets and meet demands for improved services.»
«The PSC’s new study is designed to help fill the void by providing reference material for governments on this important topic. Other published sources, including various IFAC Financial and Management Accounting Committee publications, already provide useful guidance on cost accounting in connection with commercial activities,» adds Mr. Mackintosh.
The new study may be obtained in print through the IFAC Secretariat or an online version may be downloaded from the IFAC bookstore (http://www.ifac.org). The fee for the printed version is US$25 or US$22 for the online version.
IFAC Invites Comments on New Statement On Audits of Commercial Banks
The International Federation of Accountants (IFAC) is seeking comments on a proposed new International Auditing Practice Statement (IAPS) entitled The Audit of International Commercial Banks. The new statement has been developed by IFAC’s International Auditing Practices Committee (IAPC) to provide practical assistance to auditors and to promote good practice in applying International Standards on Auditing (ISAs) to the audit of banks.
The proposed statement focuses on the various stages of the audit of a bank with emphasis on those matters which are either peculiar to, or of particular importance in, such an audit. Also included for illustrative purposes are appendices that contain examples of:
- Typical internal control procedures and substantive audit procedures for two of the major operating areas of a bank – lending and treasury operations;
- Financial ratios commonly used in the analysis of a bank’s financial condition and performance;
- Risks and issues in securities operations, private banking and asset management; and
- Typical warning signs of fraud in banking operations.
«Banks play a vital role in economic life and the continued strength and stability of the banking system is a matter of general public concern. The separate roles of bank supervisors and external auditors are important in this regard. This new guidance sets out the auditor’s role with respect to bank audits and considers special reporting relationships between auditors and bank supervisory and other regulatory authorities,» states Dietz Mertin, IAPC chairman.
The exposure draft may be downloaded from IFAC’s Web site at http://www.ifac.org. Comments are due by January 31, 2001. They may be e-mailed to EDComments@ifac.org or mailed to the attention of the Technical Director at the IFAC Secretariat in New York.