Public Sector Financial Reporting Issues: Perspectives from Users and Preparers




Kober, Ralph
Lee, Janet
Ng, Juliana

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Purpose: The past two decades have witnessed a raft of reforms introduced at all levels of Government within Australia. However, to date there has been no comprehensive analysis of the perceptions of users and preparers of public sector financial information on: (i) the appropriateness of selected conceptual framework issues; (ii) the relative usefulness of GAAP accrual-based, GFS accrual-based, and cash-based financial information for various decision specific situations; (iii) the extent to which selected accrual accounting information is considered useful for internal budgeting purposes and for external financial report users; and (iv) the appropriate accounting treatments and presentation of various information items for the general government sector as a whole. Approach: Questionnaires seeking opinions on these four areas were distributed to a sample of public sector financial statement users (both internal and external) and preparers across all federal, state, and territory departments. Findings: Our results reveal users and preparers generally do not believe that a single conceptual framework is appropriate for both private and public sectors and that any conceptual framework has to take into account the unique features of the public sector and the nature of its operations which differ from the private sector. In relation to the decision usefulness of financial information, we find that respondents consider GAAP accrual-based information the most useful, with GFS accrual-based information typically rated the least useful at departmental level. Our results on the usefulness of information for departments’ internal budgeting purposes and for external financial report users highlight the importance of asset maintenance information, which is currently not required to be separately disclosed in the financial statements, and the fact that respondents do not perceive market value of non-financial and non-traded assets as useful. We also find broad support for the financial treatment and presentation of items in accordance with the treatments and presentation required by AASB 1049.





Proceedings of the 5th Asia Pacific Interdisciplinary Research in Accounting Conference


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