IFAC partners on anti-money laundering, accrual accounting

The International Federation of Accountants teamed up with the Institute of Chartered Accountants in England and Wales on the latest installment of an educational series aimed at combating money laundering, and launched a new site dedicated to helping government entities adopt accrual accounting in partnership with other groups.

Installment Seven: Virtual Assets” is a continuation of “Anti-Money Laundering: The Basics,” a series of guides that help accountants improve their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. Installment seven examines the wide array of virtual assets that have emerged over the past decade , including bitcoin and NFTs (non-fungible tokens).

The guide offers a resource for anti-money laundering efforts, especially for small and medium practices and accountants who are less familiar with AML, while also providing guidance for those looking for a quick refresher or reference. Future installments will examine trends in money laundering and tools to fight back illegal activities. The series uses the risk-based approach of the Financial Action Task Force, a global money laundering and terrorist financing watchdog, as a starting point.

IFAC offices

Courtesy of IFAC

Separately on Monday, IFAC introduced Pathways to Accrual, a new digital access point to resources that can be used by governments and other public sector entities planning and undertaking a transition from cash to accrual accounting, including adopting and implementing International Public Sector Accounting Standards (IPSAS).

Pathways to Accrual builds upon the work of the International Public Sector Accounting Standards Board (IPSASB)’s Study 14, “Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities” with updated content and a modernized presentation with easier navigation. The site describes the benefits and implications of adopting and implementing accrual accounting including IPSAS, and explains the fundamentals of quality public financial management (PFM) for delivery of public services and transparent public finances. It explores multiple transition paths to incremental implementation of accrual, and identifies the main tasks involved with recognition of assets, liabilities, revenues and expenses, including the issues and challenges associated with the identification of, as well as measurement of, those elements in financial statements. It also offers practical suggestions, guidance and case studies based on the experience of other entities and jurisdictions, as well as provides links to other guidance and resources to help entities make the best decisions based on their unique circumstances.

“The benefits are clear: accrual accounting improves transparency, decision-making, and accountability in the public sector, but the path forward is less apparent,” said IFAC CEO Kevin Dancey in a statement Monday. “Pathways to Accrual will help accountants and public sector entities seize the opportunity of transitioning to accrual accounting by equipping them with the tools necessary to forge their own unique paths towards sound public financial management.”

The platform was developed by IFAC with content provided by the Chartered Institute of Public Finance and Accountancy (CIPFA) and feedback from the IPSASB and international community stakeholders.

“There is significant accrual adoption and implementation activity underway across all regions of the world,” said IPSASB chair Ian Carruthers in a statement. “By 2025, 50% of the jurisdictions in the 2021 International Public Sector Accountability Index are forecast to report on accrual basis, and Pathways to Accrual will be instrumental in supporting both these transitions and the many others planned for subsequent years.”

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