Govt committed to adopting new Public Financial Management practices

ISLAMABAD: To enhance Pakistan’s public financial management through robust public sector accounting standards, the government, in partnership with the World Bank, is committed to institutionalizing comprehensive Public Financial Management (PFM) practices through the development of robust Public Accounting Standards for Pakistan, aligned with international best practices.

The Auditor-General of Pakistan (AGP), in exercise of the constitutional mandate under Article 170 of the Constitution of the Islamic Republic of Pakistan, has already initiated the process for prescribing new public sector accounting standards for the country. These new accounting standards, once developed, will be specified after the President’s approval.

Pakistan’s existing public sector accounting framework, known as the New Accounting Model (NAM), was introduced in the Year 2000 and is based on the cash accounting system. Since its implementation, NAM has served as the national accounting framework for government finances.

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However, in light of evolving international developments and global best practices in public financial management, the need for an updated and more robust accounting framework has become imperative.

Accordingly, the AGP has undertaken the revision of the New Accounting Model and the development of a New Accounting Framework based on International Public Sector Accounting Standards (IPSAS) on an accrual basis. This important reform is being carried out with technical assistance from the WB.

The transition to IPSAS accrual-based accounting is expected to significantly strengthen Pakistan’s public financial management system.

The new framework will enhance transparency, improve the quality and reliability of financial reporting, and provide a comprehensive view of government assets, liabilities, revenues, and expenditures.

The revised accounting framework will apply across the Federal, Provincial, and Local Governments, thereby ensuring uniformity, comparability, and greater fiscal transparency throughout the public sector. This reform represents a major step towards aligning Pakistan’s public sector accounting practices with internationally recognized standards and best practices.

The AGP remains committed to strengthening accountability, transparency, and good governance through continuous modernization of public sector accounting and financial reporting systems, noted an official statement issued here on Monday.

Copyright Business Recorder, 2025