RIYADH: Saudi Arabia has reached a noteworthy milestone in public financial management by transitioning to International Public Sector Accounting Standards on an accrual basis.
This shift underscores the Kingdom’s dedication to modernizing its public sector financial practices, aligning with its Vision 2030 goals. The adoption of these global standards aims to boost transparency, accountability, and informed decision-making within government operations. The announcement was made at the Saudi Public Sector Accounting Forum, held on December 8 in Riyadh, under the patronage of Finance Minister Mohammed Al-Jadaan.
Abdulaziz Al-Furaih, chairman of the steering committee at the Ministry of Finance, stated at the event: “This significant achievement is a testament to the steadfast support of our leadership, which has wholeheartedly endorsed this strategic national initiative.” The forum showcased Saudi Arabia’s move to accrual-based accounting and its embrace of IPSAS.
Ian Carruthers, chairman of the International Public Sector Accounting Standards Board, highlighted that the Kingdom’s success was fueled by Vision 2030 and the robust leadership of the Ministry of Finance. Abdullah Al-Mehthil, assistant deputy minister of finance for policies and governance, explained: “Accrual accounting equips the Kingdom with the tools to make strategic decisions by offering detailed insights into long-term financial commitments and enhancing the overall quality of financial reporting.”
A crucial aspect of the forum was the cultural shift required within the public sector to sustain these changes. Mohammed Al-Nwaiser, assistant deputy minister for financial affairs and accounts at the Ministry of Finance, underscored the necessity of evolving financial practices for long-term sustainability post-transition. Abdullah Majrashi, CEO of the Financial Skills Center, emphasized the center’s role in boosting financial literacy and capacity-building within the public sector workforce.
Ross Smith, program leader and technical director at IPSASB, noted that while resistance often arises from knowledge gaps, Saudi Arabia has made significant strides through its well-structured approach. Hamad Al-Kanhal, deputy minister of finance for financial affairs and accounts, discussed the broader implications of the transformation, stating, “This is more than just adopting an accounting standard; it’s a comprehensive change management process that demands ongoing commitment and collaboration across all relevant entities.” He further highlighted that the shift would empower the government to manage its financial resources more effectively and achieve its strategic goals.
At the forum’s end, several government entities were recognized through the “Pioneers of Accrual Accounting” award program. The Ministry of Communications and Information Technology, King Saud University, and the Saudi Water Authority received the Diamond Award for their outstanding business continuity post-transition and for issuing interim financial statements. Other awards included recognition for governance and project management to the Digital Government Authority, innovative solutions to the National Center for Waste Management, and technological enablement to the Ministry of Environment, Water, and Agriculture.
The forum, which coincided with Saudi Arabia’s hosting of the IPSASB meetings, drew over 600 attendees, including local and international experts, standard-setting legislators, and leaders from various Saudi government entities.
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