Question

Explain Financial Reporting Objectives of federal government?

Answer 1

Federal government is accountable towards the stakeholders like providing information to the investors promoters debt providers creditors to enable to them make informed decisions regarding investment credit etc.

Objectives of Federal Financial Repoting i.e. Objectives of Financial Reporting of Federal government are explained as below:

- Effective Financial reporting ensures 3 Es in the organosation i.e. Effeciency, Effectiveness and economy.

- Financial Reporting ensures Internal Control and it's effectiveness to ensure that

a. transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP

b. Receipts and expenditure of the company are made in accordance with the managament authorization

c. provide reasonable assurance of prevention detection or timely correction of any unauthorized acquisition use or disposition of company's assets that can have a material impact on the financial statement of the enterprise.

-users of the financial statements also require assurance in assessing that the federal govt. will likely to continue proving all the benefits of social and economical values. eg. for education, for poor and backward class of people

- Financial reporting will enable the govt to make budget projections/ budgetary control and action plans for the upcoming years and any subsequent modifications , if necessary.

- Informed and consistent financial reporting by federal govt is necessary to find out that whether the performance and the financial position of govt has been enhanced or it has been declined over the peroid of time for eg. the credit worthiness, net worth, contingent liabilities, growth over the period etc.

- Financial reporting should assist the users to make them understand C&B analysis (cost benefit analysis) efforts and accomplishment of any particular product or programme, how th eprogramme has been financed operated , managed etc.

- Federal Financial reporting describes the status of duties of the govt towrads public because the govt is accountable towards public for all the monies and funds which have been raised from them in the forms of taxes and other funds. It also critically depicts the role of FASAB (Frderal Accounting Standard Advisory Board).  

- safeguarding assets, compliance with legal laws and regulations etc..