Materiality in Government Auditing

Frans van Schaik considers the issue of materiality in government auditing in the context of the development of public sector specific guidance on this subject by INTOSAI, the international body for public sector external auditors, based on the private sector standard. The paper finds significant evidence for the materiality level in the public sector to be different to that in the private sector, despite this evidence, such differences are not clearly documented in the auditing standard. In the process, van Schaik reviews the key considerations for materiality for public sector auditors.

Abstract
There is a striking difference in the approach taken in the preparation of public sector specific guidance on accounting and auditing. While the International Public Sector Accounting Standards Board (IPSASB) issues stand-alone public sector accounting standards, the International Organization of Supreme Audit Institutions (INTOSAI) issues practice notes, which provide supplementary guidance for the public sector, in addition to the considerations specific to the public sector contained in the International Standards on Auditing. There is a similarity in that both IPSASB and INTOSAI fly in the jet stream of private sector standard setters. IPSASB only deviates from the International Financial Reporting Standards (IFRS), issued by the IFRS Board, for public sector specific reasons. INTOSAI adds guidance to the International Standards on Auditing, issued by the International Auditing and Assurance Standards Board (IAASB). These public sector specific practice not es are called International Standards of Supreme Audit Institutions (ISSAI).

Materiality in Government Auditing

Project Management Perspective on the Adoption of Accrual-Based IPSAS

Caroline Aggestam considers the need to adopt a project management perspective with the adoption of accrual based IPSAS.
Moving from cash or modified accrual based accounting to full accrual accounting under International Public Sector Accounting Standards (IPSAS) can be a challenging endeavor. Ensuring proper convergence to accrual based IPSAS entails not only a vast amount of work in the accounting arena of any given public sector entity or government but also often major changes in business processes and practices. By using a project management approach in adopting IPSAS an organization/government can make certain that, for example: the project gets necessary support from top management; a sound governance structure is put in place; communication and training plans are developed and managed; new accounting policies are written; and necessary alignment of business processes will take place in a timely manner.

Abstract
Moving from cash or modified accrual-based accounting to full accrual accounting under International Public Sector Accounting Standards (IPSAS) can be a challenging endeavor. Ensuring proper convergence to accrual based IPSAS entails not only a vast amount of work in the accounting arena of any given public sector entity or government but also often major changes in business processes and practices. By using a project management approach in adopting IPSAS an organization/government can make certain that, for example: the project gets necessary support from top management; a sound governance structure is put in place; communication and training plans are developed and managed; new accounting policies are written; and necessary alignment of business processes will take place in a timely manner. Sound project management may facilitate cost-effective adoption of IPSAS and a broader strengthening of business practices across the implementing organization/government.

Aggestam a Project Management Perspective on the Adoption of Accrual Based IPSAS

New Guidance on Accounting and Financial Reporting for Intangible Assets

Rizvana Zameeruddin considers new guidance on accounting and financial reporting for intangible assets from the Government Accounting Standards Board (GASB) in the USA. Zameeruddin considers that when Statement 51 is appropriately used in conjunction with existing guidance, a more faithful representation of the services capacity of intangible assets, particularly in the areas of recognition, initial measurement, and amortization results. This should improve financial reporting by clarifying the classification of intangibles as capital assets and establishing guidance for internally generated intangibles.

Abstract
Before the issuance of Statement 51, the question of where public sector accountants in the US should look for guidance about reporting and accounting for intangible assets was unclear. An intangible asset was most likely accounted for under Statement 34, which defines an intangible asset as a capital asset; together with Accounting Principles Board Opinion (APB) No. 17, Intangible Assets, and Financial Accounting Standards Board (FASB) Statement No. 142, Goodwill and Other Intangible Assets. Some of the questions existing guidance raised were: should easement rights be reported, should assets donated to the government be reported differently from assets purchased, how should water rights be reported, how should internally created intangibles be valued, which intangibles, if any, should be amortized? After conferring with FASB, the International Accounting Standards Board (IASB), the American Institute of Certified Public Accountants (AICPA), and the International Public Sector Accounting Standards Boards GASB issued Statement 51 to
clarify existing guidance. When Statement 51 is appropriately used in conjunction with existing guidance, a more faithful representation of the services capacity of intangible assets, particularly in the areas of recognition, initial measurement, and amortization results can be made. This ultimately improves financial reporting by clarifying the classification of intangibles as capital assets and establishing guidance for internally generated intangibles.

Zameeruddin GASB 51 New Guidance on Accounting and Financial Reporting for Intangible Assets