Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Attachment 4.8.2 Public Sector Accounting Green Paper # 2 Accounting Hierarchy There is a hierarchy to the development, adoption, and implementation of accounting systems and accounting standards. The most basic but general level is the framework of accounting. The next level, standards, addresses specific categories of accounting and reporting needs, for all types of participating organizations. Then, the accounting policies for specific entities apply the concepts of the framework and standards to that entity. Finally, detailed instructions tell bookkeepers and accountants how to record transactions and other events in a way that results in compliance with policies and standards, and within the adopted framework of accounting. Accountancy Practice Hierarchy ACCOUNTING CONCEPTS ACCOUNTING PERSONNEL ACCOUNTING PROCESS CONTROL FRAMEWORK (one) METHODOLOGISTS (few) STANDARDS (several) FOCUS Accounting Policies (many) FOCUS instructions (very many) FOCUS SENIOR ACCOUNTANTS (many) junior accountants (very many) For the entire public sector in any country, there should be only one framework and one set of standards. These should apply to all financial accounting and general purpose financial statements. The accounting systems should also allow for additional information to be accumulated for managerial and for fiscal statistical reporting, as well as for other purposes. For example, capital assets should recognized under the accrual basis at depreciated historical cost, at valuations according to standards for capital assets, and also current cost or current value should be recorded for the same assets as required by both accounting standards and statistical reporting standards. Asset valuations at current value or current cost can be disclosed in the general purpose financial statements, either on the face or in the notes to the financial statements if depreciated historical cost is used on the face, and the current cost data can be provided for ESA 95 reporting. Accounting policies for each public sector organization will have a common methodological base which will be around 90-95% common. However, because of the considerable differences between state and local governments, and other special purpose public sector bodies, some accounting policies will be specific to the different types of public sector entities, and some might be applicable for only certain individual entities. Accounting instructions will be very similar for all public sector entities. However, since each entity operates within its own managerial and organizational procedures, processes, and time frames, accounting instructions will be developed at the entity level with specific application to that entity, perhaps based on recommended templates developed for each type of entity.