- The main objective of the Project is to assist public sector entities in the transition from the cash to the accrual basis by adoption and implementation of the International Public Sector Accounting Standards (IPSASs) which has been developed based on the Accrual basis.
- The Project is considered one of the initiatives that will support the achievement of Vision 2030. The Royal Decree number 13059 dated on 16/03/1438 approved the transition from cash to the accrual basis for public sector entities. The finance Committee at Royal Court was assigned to oversee the Project while the Executive Committee shall follow up the project progress
- The application of the project will achieve one of the Ministry of Finance strategies; by improving the quality of the financial information reported by public sector entities and enhancing the transparency as a part of the Fiscal Balance Program included in the “Vision 2030”. The transition to the accrual accounting basis is fundamental for Public Financial Management.
- The strategy of the Ministry of Finance arising from the “Vision 2030”, revolves around being a leading Ministry that enables the Kingdom of Saudi Arabia to be among the 15 largest economics in the world; through a distinguished financial system according to the values of transparency, commitment, partnership, and achievement.
- After reviewing the Conceptual Framework for General Purpose Financial Reporting, the International Public Sector Accounting Standards, and the recommended practices in the Kingdom of Saudi Arabia, the Technical Committee recommended the approval to the Steering Committee of the project.
The objectives of Transitioning to Accrual Accounting Basis in the Public Sector
Providing a better knowledge required for the identification, recognition, and measurement of the Kingdom assets, liabilities, and expenses.
Comparing the Public Sector budget with the actual amounts.
Providing necessary information to make strategic decisions in terms of control, rationalization and financial performance management.
Reporting accurate and complete balances of assets, liabilities, revenues, and expenses.
Financial and Statistical Reports
Issuing complete and accurate information about Financial Position, Financial Performance, Cash Flows Statements in public sector.
Enable international organizations to measure the credit rating of the Kingdom accurately; based on the financial data prepared in accordance with international standards.
The Transition Phases
- Phase 1: Examine the current status & perform “Gap Analysis”.
- Phase 2: Plan & design
- Phase 3: Prepare & alignment with governmental sectors
The objectives of International Public Sector Accounting Standards – IPSAS
- Enabling the public sector entities around the world to understand and implement these standards in order to provide financial information reflecting the public finance activity in a way that ensures the quality and transparency of the issued reports.
The importance of having a training program to qualify employees of public sector entities and non-profit organizations in applying international accounting standards.
- Providing what serves the public sector entities in accordance with the project transition to accrual accounting basis and IPSASs; and building the financial position of the Kingdom in order to achieve one of the pillars of “Vision 2030” concerned with improving the quality of government financial information & enhancing the transparency to improve accounting and auditing system within the transformation strategy.
- Adopting a strategy and methodology for transformation through the application of governmental accounting standards completely; and the transformation of government sectors included in the Kingdom budget to the accrual accounting basis with the support and supervision from the Ministry of Finance
- Designing an IPSAS program to assist in understanding the IPSAS standards. In this program, participants are provided with basic and detailed knowledge of IPSAS as adopted and approved by MOF; as well as enabling them to understand and apply the knowledge in dealing with reconciliation, events, and transition related to the public sector entities.
By the end of the program, participants will be able to:
- Describe and understand the conceptual framework for general purpose financial reporting by public sector entities.
- Understand the main requirements of IPSAS.
- Gain knowledge about basic and main accounting treatments, and available options, and understand IPSAS requirements.
This qualification is designed to be suitable for government employees and professionals who are already working in the field of finance/accounting in government sectors included in accounting transformation such as:
- Accounting and finance employees involved in the preparation of financial statements
- Trainers who are willing to update their knowledge of the Standards
- Implementation and follow-up teams for IPSAS.
- Employees nominated to join public sector entities.
- Internal auditors and consultants who are in charge of the financial reports.
- Certified accountants as part of continuing professional development process.
The training program includes 42 standards according to the issued standards by IPSAB. Some of the topics have been amended; and instructions and some related interpretations were also issued.