chapter 3 policy and legislative requirements for financial reporting in the south african public sector 3.1 introduction 37 3.2 policy and legislative context 37 3.3 historical context 39 3.4 the constitution and public finance 42 3.5 parliamentary oversight 44 3.5.1 parliamentary portfolio committees 45 Financial regulations protect consumers’ investments. In fact, they are almost non-existent. However, the public sector has its own debates raging. The information included in this Revised Guide, with regard to the audit of financial statements, Financial Reporting involves the disclosure of financial information to the various stakeholders about the financial performance of company. Most of the focus has been on the private sector and the fall-out from the massive commercial collapses that have recently occurred. Under state law, the financial reporting requirements of the public sector unions are more scant than under federal law. RPG 2 is designed to encourage more public sector entities to provide financial discussion and analysis. These standards have now been issued by the International Accounting Standards Board (IASB): IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases.. Memo Financial Accountability and Disclosure in the Public Sector The Background of Contemporary Public Sector Financial Accountability Traditional for-profit business organizations have always provided formal financial accountability information, mainly because stakeholders such as investors, stockholders, and partners require and expect them. Through its Public Sector Committee (PSC), IFAC addresses the needs of those involved in public sector financial reporting, accounting and auditing. The board identifies a financial reporting issues based on requests/recommendations from stakeholders or through other means. Formed in 1986, the PSC issues International Public Sector Accounting Standards (IPSAS) which serve as “bench mark guidance (for) financial reporting and accounting in the public sector”. Financial regulators oversee three main financial sectors: banking, financial markets, and consumers. Whether Government spending meets legal requirements and whether financial controls are adhered to by spending agencies Governments Economic Monitoring Authorities Whether there is deficit or surplus on current accounts the quantum, and whether to borrow or mop up liquidity in the economy The financial crisis of 2008 saw the development or accelerated development of three substantial financial reporting standards. legal and regulatory requirements as well as the unique circumstances of the public sector. It requires the reporting boundary and reporting period for the discussion and analysis to be the same as the financial statements themselves, be presented at least annually, and issued with the financial statements. The guidance herein is intended to assist auditors to meet these requirements. By Ian Mackintosh, Chairman, IFAC Public Sector Committee. Regulations prevent financial fraud and limit the risks financial institutions can take with their investors’ money. The FASB Chairman decides whether to add a project to the technical agenda, after consultation with FASB members and others as appropriate, and subject to oversight by the Foundation’s Board of Trustees. But considering the number of stakeholders involved and statutory & other regulatory requirements, Financial Reporting is a very important and critical task of an organization. Financial reporting and international accounting standards are hot topics at the moment. 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