Cafr
Comprehensive Annual Financial Report
ACC 548
November 12, 2012
Comprehensive Annual Financial Report
Having the most accurate and up-to-date financial information is important to many users of financial data in order to make informed decisions about a company. One of the ways that a company displays this information is with a Comprehensive Annual Financial Report or CAFR as most people in industry have come to know it by. The steps and preparation of preparing a CAFR provide the users the chance to view the overall financial health of a business and ensures that essential information about the business is consistent not only in information, but in content from year to year.
Governmental vs. For-profit accounting
The local, State, and Federal governments are generally involved in supplying the public with the services that are essential to the overall well being of its citizens which makes the focus of the accounting within the government on where the money comes from and where the government spends it. The private or for-profit sector is focused on making a profit and increasing the bottom line and it required to report the profit or loss and also the financial position of the company. While companies are constantly competing with each other for customers, and always concerned with making more money, governments are funded through taxes that are paid by citizens and therefore don’t have the same dependencies as the private sector does. Governments do not have investors demanding profits, however, they are held accountable by the citizens for the way they spend the resources which they are given.
Unlike the private for-profit sector, the Federal Accounting Standards advisory Board or FASAB was created for developing rules and standards strictly for the United States government. From this advisory group, the Government Accounting Standards Board or GASB was formed and became the group to provide and issue
ACC 548
November 12, 2012
Comprehensive Annual Financial Report
Having the most accurate and up-to-date financial information is important to many users of financial data in order to make informed decisions about a company. One of the ways that a company displays this information is with a Comprehensive Annual Financial Report or CAFR as most people in industry have come to know it by. The steps and preparation of preparing a CAFR provide the users the chance to view the overall financial health of a business and ensures that essential information about the business is consistent not only in information, but in content from year to year.
Governmental vs. For-profit accounting
The local, State, and Federal governments are generally involved in supplying the public with the services that are essential to the overall well being of its citizens which makes the focus of the accounting within the government on where the money comes from and where the government spends it. The private or for-profit sector is focused on making a profit and increasing the bottom line and it required to report the profit or loss and also the financial position of the company. While companies are constantly competing with each other for customers, and always concerned with making more money, governments are funded through taxes that are paid by citizens and therefore don’t have the same dependencies as the private sector does. Governments do not have investors demanding profits, however, they are held accountable by the citizens for the way they spend the resources which they are given.
Unlike the private for-profit sector, the Federal Accounting Standards advisory Board or FASAB was created for developing rules and standards strictly for the United States government. From this advisory group, the Government Accounting Standards Board or GASB was formed and became the group to provide and issue
References: Gartenstein, D. (2012). The importance of an annual report. Retrieved from http://www.ehow.com/info_7759429_importance-annual-report.html Granof, M. H. & Wardlow, P. S. (2011). Core concepts of government and not-for-profit accounting (2nd ed.). New York, NY: Wiley & Sons http://www.danvers.govoffice.com/vertical/Sites/%7BCFC0250F-19AB-46E7-B599-146187CB1799%7D/uploads/%7B56B98FAD-4BBC-45F8-A274-72CBB0D11D09%7D.PDF Klasney, Edward M., and Williams, James M. (2000). "Government Reporting Faces an Overhaul". Journal of Accountancy, 189