Accounting standards might not 'set the world on fire', but as investors in European debt have struggled as large parts of their universe went up in flames in recent years, they might have wished for more transparency, honesty and uniformity in how governments presented their financial health.
It is in investors' own interests to push for more transparent public accounts, common and more thorough accounting standards, and audits as strict as those corporates face, says Ian Ball (pictured), CEO of the International Federation of Accountants.
He argues that the Eurozone's sovereign debt crisis has provoked politicians to tackle the issue of controlling expenditure and debt, "but that has not translated back to fixing the accounting and auditing, so it has been a clamour to tackle the symptom, without examining the real cause."
He adds the disappearance of the concept of ‘risk-free' in Europe - France lost its AAA-rating in January and Great Britain's stands on negative watch - is another reason debt investors need accurate reflections of governments' balance sheets, using shared accounting standards.
Only through this will a true comparison of one nation's standing with another be possible, he says.
The issue of assessing public balance sheets is arguably of particular urgency in Europe, in part because European pension funds are typically heavy lenders - by will or by regulation - to governments, by holding debt instruments.
Ball said: "With the loss of the ‘risk-free' assumption, investors will have to start looking at the balance sheets of governments more carefully. But up to relatively recently, investors have not had a great interest in the information [in government accounts], because if something was ‘risk-free' the investors were not so worried about the information. They will have to look now at government debt in the same way they look at corporate debt."
But public sector finances often lack the high standards of accounting, and audit, that credit investors demand of corporate accounts.Ball said: "As we discovered in the case of Greece, the question of how reliable the accounting is, was called into question. If governments were accounting as companies do, we would be in a somewhat better position to assess whether the numbers were reliable."
The problem is not restricted to Europe, Ball added. America's public sector financial statement is regularly accompanied by an audit ‘disclaimer' - effectively an auditor declining to give an opinion because of insufficient information - and European government accounts have suffered a similar ignominy.
"It concerns me when you see governments not willing to be more transparent. I cannot think of an example of a major company receiving a disclaimer [from an auditor] and if one did, the markets would react extraordinarily badly - and so they should.
A selection of key moments caught on camera from InvestmentEurope's recent Pension Fund Forum in Zurich have been published.
A selection of key moments caught on camera from InvestmentEurope's recent Fund Selector Forum in Geneva have been published.