10 Objectives of Public Sector Accounting

 

In the previous article, we have explained the definition of public sector accounting (PSA). This time, we will examine 10 objectives of PSA. While record keeping may sound like an important objective, accountability and stewardship are the main objectives of government accounting. Let's explore them below:

Record keeping of transactions

The primary objective of public sector accounting is the record keeping of government business transactions. Daily civil and public servants spend public money. MDAs (Ministries, departments, and agencies) earn income from partaking in business. More so, contracts are awarded to taxpayers. These transactions must be recorded in the government accounting books.

Ensure compliance with government acts and standards 

The record of transactions as well as the preparation of their reports must comply with the various government acts and public sector accounting standards. Compliance ensures that every transaction follows due process.

Use for financial control

Control of public funds is very important. Failure of appropriate control can lead to embezzlement and corruption by public officers. If these officers follow the control process in government accounting, the above bottlenecks can be avoided.

Measure government accountability

This is one of the main objectives of public sector accounting and finance. With the knowledge of PSA, government activities can be measured. Therefore, accountability of the government cannot be avoided.

Provide a means of stewardship

Stewardship is an important aspect of government accounting. The government through its agencies collects revenue including taxes from the citizens of the country. Therefore, they must account for how these funds are utilized in providing public goods.

Provision of timely report 

Through government accounting standards, timely and accurate financial reports can be prepared by government business enterprises (GBEs). The standards specify various principles required for preparing useful reports to stakeholders.

For planning purposes

Government bodies such as the state and federal governments can use the information provided by their PSA to plan for the future. Through this annual, supplementary, and contingency budgets as a written plan.

Serves as a basis for decision-making 

Another objective of public sector accounting is that it serves as a basis for decision-making. Through the reports provided, various stakeholders and users can make informed decisions. For example, the information provided by the National Bureau of Statistics is useful for planning and decision-making.

Identify sources of funds

With the available records, the government can identify its various sources of funds and revenue. And can know which source provides the most revenue to the country. To illustrate, it is known that Nigeria was a mono-economy before the 2000s because of the data available from PSA.

Required for performance appraisal

Through PSA, public officers can be appraised about their performance in the various ministries, departments, and agencies. In addition, stakeholders can monitor how the government spends public money and provide the necessary appraisal.