Government Accounting
In any form of governance, the department of accounting exists. Government accounting can be termed as the process of managing and recording all the financial transactions in the government; this includes expenditures and income. Different governmental accounting systems are utilized for public sector entities. For instance, in America, two levels of government exist, each using or following different types of accounting standards.
Government accounting standards are the generally accepted principles on government accounting. The source of these standards is the Government accounting standard board (GASB). U.S State and federal governments regularly utilize the standards. The primary responsibility played by the board is to oversight the Financial Accounting Foundation (FAF). FAF usually selects the members who sit in the GASB. The mission of GASB is to ensure that both local and state government improves their accounting standards and financial reporting. The improvement is useful to users of financial reports who will use to educate the public on various matters.
Before the board came to existence, it was hard for a financial analyst to make decisions since there were no universally accepted standards for writing financial reports. Each person had his or her way, which they deemed to be correct. The Philippine Financial Reporting Standards (PFRs) has helped the government in accountability. This is because all the local governments and state governments will need to consolidate their financial reports. This makes it easy for people or the general public to interpret.
In conclusion, both standards have changed the perspective of accounting. They have brought a unifying principle that has enabled interpretation of Financial statements to be easy. They can be applied all over the world.