Financial Reporting Standards Between Government And Business Enterprises

Financial Reporting Standards Between Government And Business Enterprises

Length: 1024 words (2.9 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Purpose:
The purpose of this memo is to outline some of the differences in financial reporting standards between government and business enterprises. These differences require separate accounting and financial reporting standards because the needs of the users differ. For example, agencies within the government must provide financial information that meets the needs of their stakeholder which could consist of federal or state legislators, the President or governors of the states and the American people. This information provides the stakeholders with useful information that will allow them to assess the government’s accountability for the resources appropriated to conduct services and also allow the stakeholders make political, social and economic decisions based on how those resources was expanded.
The government is in a very unique operating environment and must ensure that they are accountable for the use of public resources and also safeguard the interest of the American people against fraud, waste and abuse of their tax dollars.
Why Separate Accounting and Financial Reporting Standards are Essential?
Governmental entities and business enterprises must report relevant information to the user of the financial reports. Therefore, reporting requirements must be tailored to the needs on those who are authorized to make decision for the stakeholder. The primary beneficiary of information for government entities are the American people and their elected representatives versus creditors and equity investors for a business enterprise. The needs of the American people and their elected representative emphasizes accountability for resources entrusted in the government to execute services in which those funds were appropriated f...


... middle of paper ...


... the rate at which pension benefits could be settled. In other words, business enterprises have the flexibility to use rates of return for high-quality fixed investments or annuity contracts that are currently available at the time of maturity.
In conclusion, separate accounting and financial standards are needed because the audience for governmental financial reporting are fundamentally different than businesses. The government operates in a very unique environment; therefore, reporting must be tailored to provide the stakeholder with the necessary information to make timely political, social and economic decision for the American people. It is the responsibility of the government to account for every dollar that is levied through taxation in order to ensure services are available to the American people in order to protect them and enhance quality of life.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Japan Should Adopt The International Financial Reporting Standards Essay

- This report examines the benefits and drawbacks of whether Japan should adopt the International Financial Reporting Standards (IFRS) over its current standards (GAAP). Improvements in information’s quality, long-term cost saving and other motivating factors that IFRS will bring, have been reflected in the benefits aspect. Though this standard undertook numerous benefits for the financial statement permitted by, there are various drawbacks that country must be overcome. These obstacles mostly relate to conversion costs and political issues....   [tags: International Financial Reporting Standards]

Better Essays
1035 words (3 pages)

Government Accounting Standards Board versus Financial Accounting Standards Board

- ... They are appointed for five year terms, and are eligible for an additional five year term. The FASB uses due process to implement the process of the standard setting process. The rules for setting or changing standards include; identifying financial reporting issues from stakeholders or other sources, and then the FASB decides whether or not to add the issue to the agenda. Once that is done the boards deliberates at one or more public meetings, and an Exposure Draft is issued for stakeholder input....   [tags: private vs government/non-profit companies]

Better Essays
1016 words (2.9 pages)

Essay about Improving Accounting Standards in Australia

- Introduction Intangible assets have become increasingly noticeable with accounting due to the larger amounts linked to patents, franchises and brands. Although these items are not purchasable they are generated within an organization and sometimes account for huge differences between market capitalization and book values. Over the years, the International Accounting Standards Board has focused on the uniformity of accounting standards. However, these standards will only be appreciated across the board if they are of unquestionable integrity....   [tags: Assets, Standards]

Better Essays
2624 words (7.5 pages)

Essay on Financial Report On Financial Statements

- 1. Financial statements are divided into two main categories which are general and special purpose financial reports. As for the general purpose financial reports, the major users are owners, shareholders, managers, customers, the general public and so on. Turning to the special purpose financial reports which are usually required by lenders, government and creditors. These reports need to record different information for different user’s need. Profit is the most significant element for the owners because they would like to know it from the Restaurant Brands Ltd (RBD)’s statement of comprehensive income....   [tags: Financial statements, Balance sheet]

Better Essays
1017 words (2.9 pages)

Essay about The Fair Labor Standards Act

- “The Fair Labor Standards Act (FLSA) was created in 1938 to establish a minimum wage and a limit on the number of hours which may be worked in a standard work week. It also provides standards for equal pay, overtime pay, record keeping, and child labor.” This law was created during a time period of great financial and political turmoil. The FLSA is managed and implemented by the Wage and Hour division of the United States Department of Labor. “The Wage and Hour Division (Wage-Hour) administers and enforces FLSA with respect to private employment, State and local government employment, and Federal employees of the Library of Congress, U.S....   [tags: Employment, Minimum wage, Fair Labor Standards Act]

Better Essays
2053 words (5.9 pages)

Essay on Government Intervention In Business

- At the beginning of the 20th century, the rise of monopolies forced governments to enact anti-trust legislations in order to maintain a free market. Since then, the amount of government intervention in business has grown exponentially. In recent times, fraud and moral hazard have caused a focus on corporate governance legislation. Regrettably, ethics cannot be legislated, and government intervention only hurts businesses which conduct themselves properly while doing nothing to mitigate new forms of unethically-designed financial engineering....   [tags: Business Administration]

Better Essays
978 words (2.8 pages)

The Different Functions of Financial Accounting and Managerial Accounting

- Business requires the appropriation of funds and the analysis of how these funds are and should be used. The primary task of an accountant is to account for all transactions that were done over a period of time for a specific organization and to arrange these facts into financial statements that can be analyzed. The two main types of accounting, financial and managerial accounting are used to evaluate a businesses financial status through financial information that is specific to the audience. Although financial and managerial accounting use similar primary financial statements, the analysis of the documents and the information presented differs tremendously primarily because the financial a...   [tags: accounting, financial, business]

Better Essays
1940 words (5.5 pages)

Essay on Government Regulations and Rights

- American citizens are getting tired of the governments increasing control of the economy, health care, and a dodgy recovery plan (Engstrom, 2). According to a national survey, "Voters are starting to realize that the regulations implemented by government are beginning to intrude more so on people’s personal lives" (Thompson and Tringali, 2). The survey also said that, "A majority of both conservatives (61%) and liberals (54%) say they are both negatively impacted by regulations that tell American business which workers to hire" (Thompson and Tringali, 2)....   [tags: Government]

Better Essays
2334 words (6.7 pages)

Government Regulations: Accounting Essay

- Charlie Munger once stated, “You have to know accounting. It’s the language of practical business life.” This statement emphasizes that accounting has become the center of the business world. With the world now being focused around businesses and the idea of how to make the next dollar it’s obvious that the accounting field is rapidly becoming the most influential field in the world today. With these occurrences comes regulation, and when I say regulation I mean stiff government regulations on how financial reporting is done....   [tags: Government]

Better Essays
1664 words (4.8 pages)

Essay on Ethics In Financial Business Decisions

- Ethics in Financial Business Decisions Student Name School Name Class Title Course Number Instructor’s Name Date Written Ethics in Financial Business decisions The work I reviewed begins with a simple introduction explaining the roots of ethics in America wrought with quotes from our earliest leaders including George Washington and John Adams. Additional quotes identify and support the “Ten Universal Values” of “honesty, integrity, promise-keeping, fidelity, fairness, caring, respect for others, responsible citizenship, pursuit of excellence, and accountability (Smith & Smith, 2003)....   [tags: Business Ethics]

Free Essays
965 words (2.8 pages)