Annual Cafr

Only available on StudyMode
  • Download(s) : 128
  • Published : January 12, 2013
Open Document
Text Preview
Comprehensive Annual Financial Report Briefing
ACC/548
December 3, 2012

Comprehensive Annual Financial Report Briefing

The purpose of this brief is to educate the newly elected board members on government accounting. Because the new board members are businesspeople from the community, they need to understand why government accounting is not the same as for-profit financial accounting. The brief will compare government accounting to for-profit financial accounting, describe the basic government reporting entity, and evaluate the Management Discussion and Analysis section of the Comprehensive Annual Financial Report (CAFR) for the State of Alabama. The State of Alabama’s fiscal year ended September 30, 2011 will be used in the evaluation of the MD&A section (Office of the State Comptroller, 2011). Governmental Accounting vs. For-Profit Financial Accounting Governmental accounting is not the same as for-profit financial accounting. Therefore, it is necessary that individuals employed in government entities have a good understanding of budgeting and accounting. Governments and for-profits have different purposes, activities that generate revenues, stakeholders, financial objectives, and desire to survive. Separate accounting and financial reporting standards are necessary because users of financial reports of governments and for-profits do not have the same needs (GASB, 2012). Governments are required to be accountable for the use of resources in their operating environment, unlike for-profit businesses. Governmental resources are acquired from the guaranteed payment of taxes paid by individual taxpayers. The taxes paid have no direct relationship to the services the taxpayer received. Therefore, taxpayers assess the value received from the resources they have provided to government. As a result, governmental accounting and financial reporting standards strive to help stakeholders evaluate if public resources are properly expensed...
tracking img