Key points:
- Pakistan to adopt accrual-based accounting aligned with international standards.
- Reforms aim to enhance transparency, financial discipline, and public sector management.
- The World Bank is providing technical implementation support
ISLAMABAD: Pakistan has initiated comprehensive reforms in the public sector accounting system, aiming to modernise financial reporting and strengthen governance across federal, provincial, and local governments.
The move is being led by the Auditor General of Pakistan (AGP), the Press Information Department stated on Monday.
The reform process involves developing new accounting standards on an accrual basis, in line with International Public Sector Accounting Standards (IPSAS). These standards will replace the existing cash-based New Accounting Model, which was introduced in 2000 and has formed the foundation of the country’s public financial management for over two decades.
Modernising Public Financial Management
The AGP, exercising constitutional powers under Article 170 of the Constitution, has begun reviewing the current accounting framework. Once finalised and approved by the President of Pakistan, the revised standards will be implemented across all tiers of government.
“The transition to an accrual-based accounting system will significantly improve the quality and reliability of financial information,” the AGP stated. “It will provide a complete and accurate picture of assets, liabilities, revenues, and expenditures, enhancing transparency and accountability in the public sector.”
Technical Support and Global Alignment
The reforms are being carried out with technical assistance from the World Bank. They represent Pakistan’s first effort to align public financial reporting with internationally recognised IPSAS standards. Experts say the move will foster uniformity, comparability, and transparency in government accounts. Once done, the reforms would bolster trust in public sector financial information.
According to the AGP, the revised accounting framework will modernise the country’s financial management system; strengthen public accountability and governance; and improve reporting standards and reliability for decision-makers and stakeholders.
The initiative underscores Pakistan’s commitment to adopting globally recognised financial standards and represents a key step toward enhancing fiscal discipline and transparency in the public sector.
