Abstract:
In section 40(1)b of the Public Finance Management Act, No. 1 of 1999 (as amended), accounting officers of departments, trading entities or constitutional institutions are required to prepare financial statements for each financial year in accordance with generally recognised accounting practice (GRAP). In terms of section 87 of the Act, an Accounting Standards Board (ASB) should be established in South Africa which, in terms of section 89(1), should set GRAP standards. In setting GRAP standards, the ASB should in terms of section 89(2)a follow both local and international best accounting practice. From recent literature it would appear that international best practice in the public sector is the accrual basis of accounting and pronouncements by authoritative bodies support this trends.
