The process followed for the development of Standards
Statements of GRAP and other publications are developed through a due process that involves accountants, auditors, preparers, regulators, legal authorities and users of financial statements in the public sector.
The Board remains relevant to its constituents only if it carefully weighs their views so that the concepts and standards developed by the Board meet the accountability and decision-making needs of the users of government financial statements. Due process is the vehicle through which the Board is able to ensure its continued relevance and the quality and independence of its recommendations.
Generally, the due process is considered to be the Board’s request for and consideration of comments on proposed standards. However, due process actually starts when the Board’s work programme is developed.
Once a project has formally been added to the work programme, a secretariat staff member is assigned to lead the project and basic research begins. This research, conducted by the secretariat staff, includes identification and review of all the issues associated with the topic and consideration of the application of the Conceptual Framework to the issues. They also study other national accounting requirements and practices and Standards issued by other national or international standard setters. Constituent participation is fundamental to the relevance and success of all stages of the Board’s deliberations.
Shortly after a project is started, the project group is constituted. stakeholders. Care is taken to ensure that the project group is representative of all stakeholders. The number of members on a given project group varies, depending on the topic and complexity of the project. Project group members give advice on the project and where no IPSAS or IFRS Standards exists, assist in preparing a discussion document.
For some projects the first document is a discussion paper. This document is intended to present various accounting and financial reporting alternatives for each identified issue and propose principles for addressing the issue. A discussion paper is approved by the Board and released for comment by stakeholders. The same due process is followed for discussion papers and Exposure Drafts. For most projects, the first document is an Exposure Draft requesting comments from interested parties including auditors, preparers (including treasuries), standard setters and individuals. The Board approves the exposure draft for a reasonable time (normally three months) to allow stakeholders to consider and comment on its proposals. The length of the exposure period is often dictated by the complexity of, or controversy surrounding the project.
The exposure draft will be published on the Board’s website and notice of its publication will be given in the Government Gazette. Those affected by the Board’s pronouncements will be afforded an opportunity to present their views before the pronouncements are finalised and approved by the Board. Comments on exposure drafts may be submitted either by mail or e-mail.
The Board does not know stakeholders’ position on a given issue unless they receive feedback. Generally the number of comments that the Board receives is relatively low. For most projects, between 5 and 10 comment letters are submitted, primarily from firms, the National Treasury and professional institutions. Comment letters can result in substantial changes to the final standard. Often, stakeholders only comment when they have concerns about a proposal. However, feedback should not be limited to concerns. It is equally important for the Board to know when stakeholders support a proposal. Comments that express either support or concern can assist the Board in developing its final conclusions. One compelling comment can make a difference.
The Board relies on the comments of those who prepare or audit government financial statements, as well as government budget officers and others with expertise in government financial affairs, for feedback on the conceptual soundness, technical accuracy, practicality and appropriateness of its proposals. Comment letters can also indicate to the Board whether the information provided by the proposals will be useful to users for decision making purposes and relevant for accountability.
The Board recognises that respondents have different backgrounds and experience from which valuable feedback can be obtained, and that not all respondents will have comments on every issue addressed in a document. In general, the more comprehensive the response, the more assistance it provides to the Board, but all input, general or specific, comprehensive or targeted, is appreciated by the Board.
To all of our stakeholders that have provided comment letters in the past: thank you very much. We hope that we can count on your continued support. To those who have not responded in the past: please do so — we look forward to hearing from you!
When a comment letter is submitted, it is received by the secretariat. Comments are incorporated into one document and responses are included providing reasons for either accepting or rejecting comments. Every comment received is presented and considered by the Technical Committee.
The penultimate step is for the exposure draft to be updated, incorporating the relevent comments received.