What are Accounting Standards?

Accounting standards are authoritative standards for financial accounting and reporting developed through an organised standard-setting process and issued by a recognized standard setting body (the Accounting Standards Board (Board)). The accounting standards as set by the Board specify how transactions and other events are to be recognised, measured, presented and disclosed in government financial statements. The objective of such standards is to meet the needs of users of financial statements by providing the information needed for accountability and decision making.

Who should apply these Standards?

The Board has approved the application of International Financial Reporting Standards (IFRS® Standards) issued by the International Accounting Standards Board® for:
(a) public entities that meet the criteria outlined in the Directive on The selection of and Appropriate Reporting Framework by Public Entities; and
(b) entities under the ownership control of these entities.

The Board must determine GRAP for the following institutions:

  •          departments (including national and provincial and government components);
  •          public entities;
  •          trading entities;
  •          constitutional institutions;
  •          municipalities, municipal entities or any other entities under the ownership control of a municipality and, boards, commissions, companies, corporations and funds;
  •          Parliament and the provincial legislatures.

 

The Board has approved the application of International Financial Reporting Standards (IFRS® Standards) issued by the International Accounting Standards Board® for:

(a)       public entities that meet the criteria outlined in the Directive on The Selection of an Appropriate Reporting Framework by Public Entities; and

(b)       entities under the ownership control of any of these entities.

The Board

The Board has the authority to set accounting standards for all spheres of government. The responsibilities of the Board are set out in its Regulations.

In meeting its objectives, the Board:

  • Are committed to serve the public interest.
  • Respect and encourage input from all its stakeholders.
  • Bring objectivity to the consideration of issues.
  • Respect the ability of its stakeholders to exercise professional judgment.
  • Be committed to timeliness in its responses to stakeholder needs.

The Board normally meets four times a year for full Board meetings. The Board may have additional meetings to meet their objectives.

Structure and Members of the Board

The Board consists of a maximum of 10 members including the Chair.

Project Groups

The Board’s standards are developed by the people who prepare, audit and use government financial statements and reports — i.e., those who will be governed by the standards. These groups are called project groups.

Members of Board and its project groups are not appointed by other organisations. The Board recruits individuals, and all Board and project group members serve as individuals and not as representatives of their organisations. This policy allows for a full and open debate on issues.

Members are recruited based on the following criteria: their commitment to the Board objectives, their technical knowledge, their ability to consider the practical aspects of issues being considered, and their ability to influence the adoption of standards and the building of consensus on the Board’s positions.

It is the aim of the Board to draw project group members from the ranks of senior government officials, including CFO’s and municipal managers, auditors, budget directors, and municipal and provincial treasurers and auditors, as well as academics, bond-raters and other experts in government accounting and auditing.

Secretariat of the Accounting Standards Board

The day to day operations of the Accounting Standards Board are managed by Chief Executive Officer, Erna Swart and a professional team of six staff members.

How do topics get on the Board’s agenda?

The Board identifies projects that are relevent to achieving the ASB’s strategic goals and strategic objectives. Projects are identified in two ways:

  • Projects are identified for a three year period based on feedback from stakeholders through public consultations on the Board’s work programme.
  • During the three year period, projects may also be identified based on interactions with stakeholders such as National Treasury, the Auditor-General South Africa (AGSA) and other stakeholders in order to address specific issues that arise. Projects identified in this way are usually to address unexpected, urgent or other issues that arise outside the consultation process on the work programme.