The ICAEW is calling on the government to replace its traditional Comprehensive Spending Review (CSR) with a Comprehensive Financial Review (CFR) which would bring its examination of the UK's finances in line with commercial company practice.

The institute says that this week's CSR will fail to provide a full picture of the UK's financial resources. It wants the government to look at using a CFR which would include analysis of include assets and liabilities as well as income and expenditure.

Michael Izza, ICAEW chief executive, said: 'At the moment the CSR creates inevitable tensions between departments, where as a CFR would focus on the intended outcomes of current spending and how the spending decisions across departments would contribute to these outcomes. This is common practice in the commercial sector and we are convinced it can benefit the public sector too.'

Izza said a CFR would look at balance sheet management to include not only income and expenditure but also the UK's assets and liabilities. It would also manage liquidity so spending decisions are optimised and more outcomes focus on current spending.