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“African governments are seeing IPSAS as a way to improve the way they manage public assets and thus accelerate service delivery and drive accountability.”

How to succeed in your IPSAS journey

Stephan van der Merwe (CA) SA, Product Manager, CaseWare Africa, explains why many of Africa’s leading countries have committed to implementing IPSAS, the International Public Sector Accounting Standards.

The right tools and support will increase the chances of success in what is a tricky transition, African governments are seeing IPSAS as a way to improve the way they manage public assets and thus accelerate service delivery and drive accountability. They also recognise that enhanced financial management will create more stable economies, reduce the chance of social unrest and, crucially, attract vital foreign investment. Making the transition to IPSAS successfully is thus a national priority, and the right software and support can make all the difference.

Accrual-based accounting like IPSAS improves public sector reporting by taking the rights and obligations of financial transactions into account, not just the transactions themselves. This accords well with the reality that governments are not in business to make profits, but to deliver public services. Making the link between money spent and results achieved more transparent thus reflects better what governments are doing, and builds citizen and investor confidence.

In addition, the fact that a government’s financial reporting uses internationally comparable standards makes it easier for foreign investors to assess the economy’s stability and potential.

“We should not underestimate the potential pitfalls when moving to IPSAS”

Many government entities will be converting from frameworks like IFRS, which has a for-profit basis or Cash Accounting, which have limited recognition for rights and obligations. This conversion process is greatly aided by partnering with CaseWare because our templates have been refined through numerous global implementations, and thus can enable a smooth transition process,” he says. “CaseWare will also ensure that the maximum amount of automation occurs, thus reducing the time commitment of staff and enhancing accuracy.

To realise the benefits of IPSAS one needs to look beyond compliance for compliance’s sake to what the outcomes are intended to be. Using CaseWare will make that possible because it embeds the spirit as well as the letter of the standard into the entity, and gives staff the bandwidth they need.

Most governments have mandated a staggered transition to allow the conversion process to be taken carefully. For example, the Zambian government has indicated that government ministries, provinces and spending agencies will have to use IPSAS for financial statements for periods ending on or after 31 December 2022, while non-governmental public sector entities and not-for-profit organisations must comply two years earlier, by 31 December 2020.*

A further important consideration is that no set of standards is static. IPSAS is constantly being updated as new issues emerge and thinking changes. CaseWare is constantly updating its software to ensure that these changes are incorporated into the software.

“We can go further than simply staying abreast of changes”

We also spend a lot of time ensuring the specific requirements of a country, for example, additional disclosure due to other legal requirements, are also considered in our development. Partnering with a global leader like CaseWare will not only make the transition to IPSAS much easier and more successful, it will ensure that the organisation is future-proofed as well. IPSAS is important: make sure it’s a success, now and into the future.

* Zambia Institute of Chartered Accountants, “Accounting Pronouncement: 2018/3—Applicability of International Public Sector Accounting Standards (IPSAS) in Zambia”.

Stephan van der Merwe, Product Manager, CaseWare Africa a division of AdaptIT division

Stephan van der Merwe is an immensely experienced executive in the financial services industry. He was an audit manager at the Auditor General where he served large public entities. His tenure there was the catalyst that developed his passion for auditing in the public sector. 
He went on to become Financial Manager at a large legal firm where he was exposed to the intricacies of legal requirements and operational success in the South African auditing profession. 
He then joined CaseWare Africa (at that time the company was CQS Holdings and renamed in 2017 to CaseWare Africa following its acquisition by Adapt IT). Stephan’s personal industry experience has helped him to apply his knowledge to CaseWare’s products and add value that is not only technically sound but also industry relevant.

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