As opposite, in private sector accounting (for the purpose to improve the financial position of the company) the sales are recognized when the products or services have been rendered and the payment has been received or is expected to be received in a very short time. The costs are recognized as deduction from income if there is a subjective view that these costs are to lead to future income generation in the coming periods. Usage of accrual accounting is considered an advantage for public firms as balancing expenses and income is a good controlling and performance measure. On the other hand, in public sector, the income for the company does not depend on the performance of the management, nor does the expenditures are not a function of beneficiaries actions, accrual accounting system must be adopted to the specific economic nature of these organizations. This difference in accounting by private firms is dictated by the fact that the companies strive to work longer term and attract funds from shareholders at lower cost possible by promising them good returns from the investment decisions they make. While hired management of the governmental companies are not usually that long-term horizon driven and are simply hired to carry out specific typically prescribed functions. For the private enterprises management it is more important to show that the business is rolling by reflecting the sales when the products were shipped, for example, while for the governmental bodies it is more vital to represent that the cash is spent according to the schedule and not necessarily rapidly. Some scholars argue that transferring the public sector to the same economic principles than private firms would be more beneficial to the nation as the U.S.A. And other developed countries enjoy their wealth only due to market environment and profit maximizing actions of the enterprises. On the other hand, a recent study has revealed that transferring some of the governmental defense purchases to commercial base did not lead to more efficiency in this process and only lead to more costs incurred as DOD was no longer able to exploit its' "monopoly...
Furthermore, the law requires governmental bodies to separate transfer of funds between each other and account for them separately either in income or expenses. Within private enterprise, equity can be distributed among the shareholders and is a residual value of the firm. In public companies, equity is more a balancing notion and is contrast to rights of owners in the private business. Required Supplementary Information (RSI) must be submitted together with the annual financial reporting of a governmental body and this addendum is basically a comparison of the funds prescribed to the governmental body by the budget and the actually incurred expenses. In federal government accounting the notion where the funds are allocated from the government to the company only for specific purposes and then are checked to comply is referred to as fiscal accountability.
Federal Government I do not believe that the health component is adequately addressed in the planning for a WMD incident. This is because the Homeland Security Planning Scenarios are unrealistic in trying to envision threats to the homeland. These envisioned threats are "worst-case" scenarios, which are good to demonstrate good leadership. However, they are not good for making resourcing decisions which would include the heath component and health care funding. These
Privatization is the use of the private sector in government management and delivery of public services. Contracting out services predates the Constitution. In fact, in the early nineteenth century, some "inherently" governmental functions such as tax collection, mail delivery, and spying were performed by private contractors. Throughout the twentieth century, the government has continued to rely on contractors. The Clinton administration, under the 1998 Federal Activities Reform Act, required federal agencies
Accounting and the Public Interest: The accounting profession is not only an integral aspect of the society but it also plays a critical role in the nation and the corporate sector. As a result, this profession is expected to serve or contribute towards the public interest. The ability of the accounting profession to contribute towards the public interest is determined in the context of its standard setting process and legislation. In
A micro considers the interests and rights of the individual company as the primary concern. Both of these views are valid depending on the lens that one wishes to use. The problem arises when the government is forced to develop policies regarding procurement in this volatile debate. The government must decide whether to take a micro view, favoring the rights of companies, or a macro view that places the
Accounting, by its nature, requires a set of standards that are exactly the same industry-wide. If there were not established rules for determining revenues, profits, expenses, and other influences on a company's bottom line, there would be no way to evaluate a corporation's effectivity, production, or potential. A lack of established standards would also mean that no two companies could be honestly compared, since their accounting methods could be so
Federal Budget Process Every year the federal administration is involved with a total revenue and expenditure of about 1.5 trillion USD as a matter of fiscal practice. (Keith, 1996) The budgetary strategy of the federal administration is an integration of the guidelines that the policy makers, legislator, bureaucrats apply for designing, continuing, regulating and accounting fro the expenditure and revenue strategy. Normally the budgetary strategy involves formulation of the budget of
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