Government accounting refers to the process of recording and reporting financial transactions and activities of a government entity. This includes budgeting, financial planning, and preparation of financial statements such as balance sheets and income statements. Government accounting also includes compliance with laws and regulations specific to government entities, such as the Federal Accounting Standards Advisory Board (FASAB) for the US government. The principles and practices of government accounting are generally based on Generally Accepted Accounting Principles (GAAP) and International Public Sector Accounting Standards (IPSAS).
Tasks in government accounting
Some common tasks in government accounting include:
- Budget preparation and management: creating and monitoring a budget for the government entity to ensure that resources are allocated effectively and that expenses are kept within budgeted amounts.
- Financial reporting: preparing and publishing financial statements, such as balance sheets, income statements, and cash flow statements, to provide transparency and accountability to taxpayers and other stakeholders.
- Compliance with laws and regulations: ensuring that the government entity follows all applicable laws and regulations, including those related to financial reporting and accounting.
- Auditing: reviewing and verifying financial records to ensure accuracy and compliance with laws and regulations.
- Accounts payable and receivable: managing the government entity's payables and receivables, including processing invoices and issuing payments.
- Procurement: managing the procurement of goods and services, including creating and managing contracts with vendors and suppliers.
- Payroll management: managing the payroll and benefits for government employees.
- Taxation: ensuring compliance with tax laws and regulations and filing tax returns on behalf of the government entity.
- Grant management: managing the government grants and funding provided to the entity.
- Internal control: maintaining the internal control system to ensure the reliability of financial reporting, compliance with laws and regulations, and safeguarding of assets.
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- Chan, J. L. (2003). Government accounting: an assessment of theory, purposes and standards. Public Money & Management, 23(1), 13-20.
- Chan, J. L., Jones, R. H., & Lüder, K. G. (1996). Modeling governmental accounting innovations. Research in governmental and nonprofit accounting, 9, 1-19.