Hundred and seventh Session
Rome, 8 – 14 May 2004
Status Report on HLCM Working Group on Accounting Standards
1. Current UN System Accounting Standards (UNSAS) have been developed by a task force comprising accounting specialists of organizations of the UN system, in consultation with the Panel of External Auditors of the United Nations, the Specialized Agencies and the International Atomic Energy Agency, and have been endorsed by the General Assembly.
2. The primary objective of the standards is to provide a framework for accounting and financial reporting in the United Nations system which reflects generally accepted accounting principles, while taking account of the specific characteristics and needs of the system. In conjunction with organizations’ financial regulations and relevant decisions of each legislative authority, the standards form the basis for the accounting policies of each organization, and guide accounting practice in all matters of material significance. The Panel of External Auditors in 1999 informed the Secretary-General of their view that the UN standards were too open to individual organizations’ interpretation and of the need for more consistent application of accounting standards in the UN System. The UN’s High Level Committee on Management (HLCM) has adopted a “two track” approach: gradually introduce necessary changes to UNSAS while conducting a full review of existing international standards which could be adopted by the UN.
3. The HLCM set up a Task Force on Accounting Standards, chaired by the UN Secretariat. The HLCM has recently approved proposals from the Task Force with respect to:
4. The project will engage appropriate expertise from the accounting profession to help review the impact on UN accounting standards of accounting standards in the public and private sector, such as International Public Sector Accounting Standards (IPSAS) and International Accounting Standards (IAS). This is a highly technical area in which UN organizations will benefit from external expertise. The two-year project will be funded with resources from all UN organizations and the work plan calls for presentation of recommendations on accounting standards or best practice (or combination thereof) by early 2005, with a recommended timeline for adoption. Phase 2 of the project would then analyze in detail the implications of adopting the recommended standards and the impact on each organization’s financial regulations and rules and consider implementation costs, including systems changes, for each organization.