Question

Describe the difference between a comprehensive annual financial report (CAFR) and GASB general purpose external financial reporting for state and local governments.

Answer 1

ANSWER-

Step-1

Meaning of Comprehensive Annual Financial Reports and General Accounting Standards Board -

• COMPREHENSIVE ANNUAL FINANCIAL REPORTS (CAFR)- It is an instrument or a set of financial statements and reports which contains all the information about public finance and how this public finance is used in different ways for the States. This report provides a thorough view on how city or local and state governments manage public finance.
• GASB( THE GENERAL ACCOUNTING STANDARDS BOARD)- This is an independent body which provides a set of rules, regulations and principles which guides State governments and local government to prepare financial statements and performance under the guidelines of GAAP(Generally Accepted Accounting Practices). It gives uniformity among all the Accounting practices.

​​​​​​​Step-2

Difference between CAFR AND GASB-

• ​​​​​​PURPOSE- The main difference between Comprehensive Annual Financial Reports and General Accounting Standards Board is there different purposes.

1. The purpose of Comprehensive Annual Financial Reports is to provide full financial disclosure, financial transparency and promote Accountability about the financial statements and reports which shows how state and local government use public finance.
2. The purpose of GENERAL ACCOUNTING STANDARDS BOARD is to provide or apply uniformity among Accounting practices with GAAP, which will be done by State and local government.

• CITIZEN TRUST-

1. ​​​​​​​CAFR(Comprehensive Annual Financial Reports) win citizens trust by showing how and what state government are doing with there money. They shows in CAFR.

• GASB( GENERAL ACCOUNTING STANDARDS BOARD)- As GASB provides uniformity in financial and accounting practices, public can easily understand the financial statements and can vote the trustworthy public officials.

These two are the main basis difference between Comprehensive Annual Financial Reports and General Accounting Standards Board. As COMPREHENSIVE ANNUAL FINANCIAL REPORTS is prepared for the General public, investors etc under the guidelines of GAAP and overseen by GASB.