Accountability and Financial Reporting in Government
Different stakeholders utilize government financial reports, and the three main categories of users include investors and creditors, oversight and legislative officials, and the citizenry. Moreover, government financial reports are used for various reasons, such as in the process of making social, political, and economic decisions. Considering the variations with regard to users of financial statements, it is imperative for the government to ensure a high level of accountability.
According to Governmental Accounting Standards Board (GASB), accountability is the major objective in government financial reporting. Governments have a responsibility to ensure that they provide citizens with sufficient and accurate financial information regarding the government’s operations. Providing such information encourages the public to engage in debates; therefore, the citizens have an opportunity to assess and evaluate whether the government acted with the financial and legal constraints that have been implemented.
Moreover, the element of accountability provides the citizenry with an opportunity to assess their country’s inter-period equity. This goal is attained by determining whether the revenues collected are sufficient to cater to the services that the government will consume within a particular year. Making such an evaluation enables the citizens to determine whether they will incur the additional burden of catering for their government’s operations through increased taxes.
In order to promote accountability, governments should ensure that the elements of relevance, comparability, understandability, timeliness, reliability, and consistency are adhered to in the process. In summary, accountability forms the cornerstone in government reporting, which arises from the fact that citizens have a constitutional right to be informed on the revenues collected and how public resources are utilized. Therefore, public officials have a responsibility to availing government financial reports to citizens.