Government Accounting

Government Accounting

Business Dictionary

Before proceeding to determine the meaning of the term government accounting, it is necessary that we make it clear what the etymological origin of it is. In this sense, we have to state that the two words that make it up come from Latin:
• Accounting is the result of the sum of several Latin components: the prefix “con-”; the verb “putare”, which means “to calculate”; the particle “-bilis”, which is equivalent to “that can”; and the suffix “-dad”, which is used to indicate “quality”.
• Governmental, on the other hand, is the result of the union of three Latin elements: the vergo “governmental”, which means “to govern”; the suffix “-al”, which is used as a synonym for “relative to”; and the suffix “-mento”, which indicates “instrument”.

The accounting is the art and science that provides useful information for making financial decisions. The accountant or accountant is in charge of studying the patrimony of an entity and dumps its results in an accounting or financial statement that supposes a summary of the economic situation.

Governmental, on the other hand, is what belongs to or relative to the State government. It can be said that the government is linked to political leadership, while the State is a form of sovereign and coercive social organization.

The government accounting, therefore, is the type of accounting that records financial transactions of entities and agencies of government. All quantifiable economic events that affect the State are part of the interest of government accounting.

Through government accounting, the leaders in charge of running the State must be accountable to the competent bodies to show how they manage public money.

Specifically, we can establish that there are several users of government accounting. Thus, among those are the legislature, investors, economic analysts, creditors, resource providers, financial analysts or international agencies, for example.

Likewise, it must be taken into account that when talking about this type of accounting, it is essential to determine that its structure is delimited by three elements, which are the principle of legality, the basic principles of government accounting and the particular rules based on the criterion prudential.

Among the fundamental characteristics that government accounting must have are the following:
• Comprehensive registration and coverage thereof.
• Uniformity.
• Regulatory centralization.
• Doctrinal framework.
• Operational decentralization.
• Accounting control of assets.
• Operation in an integrated way with other systems.
• Structuring based, among other things, on data flow.

Similarly, government accounting is an essential tool for budgeting. Although it depends on each constitution, the most common is that the budget is submitted to parliamentary debate. The information that makes it possible to defend or criticize the budget comes from the balance sheets provided by government accounting.

It is important to note that government accounting is governed by various laws and regulated by various institutions. The intention is that the government of the day does not take advantage of its position to use state funds according to its convenience and interests, but that financial management is transparent.

Government Accounting