What Are The Objectives Of Public Sector Accounting

OBJECTIVES OF PUBLIC SECTOR ACCOUNTING

1)            to provide financial information useful for determining and predicting the flows, balances, and requirements of short-term financial resources of the government;

2)            to provide financial information useful for determining and predicting the economic condition of the government unit and changes therein;

3)   to provide financial information useful for monitoring performance under terms of legal, contractual, and fiduciary requirements;

4)   to provide information useful for planning and budgeting and for predicting the impact of the acquisition and allocation of resources on the achievement of operational objectives; and

5)   to provide information useful for evaluating managerial and organizational performances.

6)   determining the costs of program, functions, and activities in a manner that facilitates analysis and valid comparison, with established criteria among periods and with other sector ministries;

1. for evaluating the efficiency and economy of operations of organizational units, programs, activities, and functions
2. for evaluating the results of programs, activities, and functions and their effectiveness in achieving their goals and objectives; and
3. for evaluating the equity with which the burden of providing resources for government operations is imposed.

The primary objective of accounting and financial reporting in government is to provide useful information for assessing management performance and stewardship.

Assessing this involves determining what an entity has achieved and what it can achieve in the future. In assessing past performance, information must provide indications on:

financial viability (the ability of the entity to provide the same level of resources) ° program activity (the degree of activity under various programs including costs of inputs and value of outputs);

fiscal compliance (whether financial and related laws and regulations were followed.

Another aim of financial statements of public sector bodies is to provide information on which constituents (taxpayers, ratepayers, lenders, donors, etc.) can base a decision to retain or replace decision-makers.

Decision-makers have a corresponding obligation of accountability to publish

financial statements to fulfill the requirements of accountability. They should provide evidence of:

(a)      stewardship of financial resources;

(b)     faithful compliance with legal requirements and administrative policies;

(c)       economy and efficiency of operations; and

(ci) produce results of programs and activities.