Question

Explain which governmental entitles are required to report financial information

Answer 1

Unlike most private sector organizations, governmental entities must be responsive to a number of different groups and organizations, including elected officials, other units of governments, investors, creditors, and citizens that are focused on monitoring their activities. All forms of monitoring include collecting and interpreting data, and this oversight function is often performed through information provided in governmental reports. Among the most important types of communication is the annual financial report, which presents the financial position, operating results, and cash flows for a particular accounting period. All governments, including school districts, develop their annual financial reports in accordance with principles established by standard-setting authorities to provide consistency and comparability for users.

For governments to achieve the objective of accountability, financial information must be both relevant and reliable for reasonably informed users. Financial reports must satisfy numerous and diverse needs or objectives, including short-term financial position and liquidity, budgetary and legal compliance, and issues having a long-term focus such as capital budgeting and maintenance. Additionally, differences exist in the amount of detail that various users need.

It is important for governments to provide effective financial information to constituencies in a consistent and clear format. Specifically, the information provided by governments should contribute to accountability in the following areas:

• Financial position and results of operations
• Actual financial results compared with adopted budgets
• Compliance with finance-related laws, rules and regulations
• Efficiency and effectiveness of operations
• Maintenance of governmental assets

Consistency in financial reporting by governments is provided through accounting standards.

Government Reporting Entity. The government reporting entity (GRE) is comprised of government components and those organizations that are controlled by the government.In general, the GRE is made up of GNWT Departments, Public Agencies and Other Reporting Bodies as defined in the Financial Administration Act.