This Guidance on Good Practices in Public Sector Financial Reporting and Fiscal Transparency is a knowledge paper of the World Bank Institutions Department developed under the PULSAR Program.

Comprehensive and accurate public sector financial reporting ensures that governments have the financial information they need for informed decision making. It can facilitate greater fiscal transparency and public disclosure to improve accountability and performance. One focus of the regional PULSAR program is to raise awareness of the rationale for public sector accounting reform, including demonstrating the benefits of accrual accounting and encouraging consensus among stakeholders on the reform agenda and implementation.

This paper offers guidance to support the improvement of public sector financial reporting and fiscal transparency, in line with international standards and in accordance with good practice, that enhance government accountability, transparency, and performance. It is aimed at a broad audience including both users and preparers: public officials, politicians, accountants, investors, development organizations, academia, civil society, and other stakeholders.

Assessing the sustainability of public finances is crucial for economic stability and growth and development. This means that governments have a duty to:

• develop credible, accurate, and complete financial information taking into account both the short- and long-term impact of policy decisions;
• create structures that allow their decisions to be challenged and held up to scrutiny and assurance;
• communicate information to stakeholders in an open, transparent, and accessible way;
• build trust and confidence in financial reporting.

This guide includes an overview, practical examples, and case studies from various countries, illustrating their approaches to financial reporting within the public sector, including state-owned enterprises.