Financial Accountability

Financial Accountability is the obligation to explain one's actions or to justify what one does. Accountability is one of the primary objectives of financial reporting.

It is information about how management discharged its stewardship responsibility to owners or to the citizenry regarding the use of resources entrusted to it.

“Accountability requires governments to answer to the citizenry—to justify the raising of public resources and the purposes for which they are used.” (GASBCS 1.56)

In governmental accounting, financial accountability can include accountability of one entity for another, as when a primary government reports for component units for which it is financial accountable because either:

-the other entity is fiscally dependent on the reporting government or
-the reporting government either: appointed the voting majority of the governing body or
-created and has the power to unilaterally abolish another entity and that it also either:
-can impose its will upon or has a financial benefit or burden relationship with.



Related Posts

Accounting Change

An accounting change is a change in (1) an accounting principle, (2) an accounting estimate, or (3) the reporting entity. The correction of an error in previously issued financial statements is not an accounting change. FASB ASC 250-10-20

Financial Statement Account Balance

An account balance is a dollar amount appearing on financial statements. An account balance is a control account composed of many constituent items (e.g., accounts receivable control account represents the sum of all individual accounts receivable, sales represents the sum of hundreds of sales invoices).

Leave a Reply